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’Tis the Season: The 4-Gift Rule Can Help You Stick to Your Holiday Budget

Closeup of child holding holiday gifts,by the Christmas tree
miodrag ignjatovic/Getty Images


As a parent, you want what’s best for your children.

Around the holidays, that can easily translate into wanting to buy your kids all the presents — especially if you have your own dear childhood memories of receiving stacks of gifts under the tree Christmas morning.

However, overspending to fulfill long wish lists isn’t wise.

Now I’m not saying be a Scrooge and eliminate gifts altogether. But setting limits on how you spend can be helpful.

The Wonders of the Four-Gift Rule

Around this time last year, I learned about the four-gift rule via social media.

I’m not sure of its origins, but the premise is pretty simple: You only get four Christmas presents for each kid:

  • Something they want
  • Something they need
  • Something to wear
  • Something to read

One gift per category — that’s it.

There are several things I love about this particular challenge. It sets clear boundaries on what types of gifts to buy, so you don’t spend all your money at the toy store on stuff your little one may quickly lose interest in.

Speaking of interest, when you limit the amount of gifts to four, kids can better focus their attention on the few items they do get (unless, of course, grandparents and other gift-giving relatives and friends choose to go the overindulgent route).

I like that this gift-giving challenge prioritizes getting items your children need and will wear — which is stuff you’d probably end up having to purchase anyway.

And, as a bookworm, I love the “something to read” category: You can never have too many books.

Make It Work for You

One flaw I do find with this particular challenge is that it doesn’t limit how much you spend.

If overspending is your concern, I’d recommend setting caps on how much you want to spend for each category and stick to your budget.

Other ways of limiting presents may work better for your family. This Today article shares how one family modeled their gift-giving strategy on the three wise men’s gifts of gold, frankincense and myrrh for baby Jesus.

I’ll be real: It can be difficult to place limits on gift giving, especially when your child is caught up in the magic of Santa Claus. I myself am on the fence as to whether I’ll try the four-gift challenge with my 3-year-old this year or indulge a bit more but make up for it with lean spending in the first couple months of the new year.

Ultimately, you have to do what’s best for your family. Whether that’s sticking with a four-gift limit or a one-gift limit, the holidays aren’t about what you get — it’s the love you give that counts.

Nicole Dow is a staff writer at The Penny Hoarder. She enjoys writing about parenting and money.

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