Every year we set per-person limits on our holiday gifts. The year we were making less than the proverbial church mice I'm always comparing us to, our gift limit per person maxed out at $25 for family members. (Full disclosure: that was 2 years ago.) This year, I'm spending $30 per person, or $60 per couple. I have 10 people to buy for, so that's $300 this year on gifts. At work, we give nominal gifts to just a few people or nothing at all (as is the custom in our offices.)
My husband and I generally only exchange gifts once a year. He gets something for his birthday, and I usually get something for our anniversary or my birthday. This year I spent $250 on him, and he'll spend almost the exact same amount on me. That comes out to $62 for each of us for the 4 major holidays marked by gift-exchanging: Valentine's, birthdays, anniversaries, and christmas.
According to MsMoney, the average American buys gifts for 15 people and spends an average of $75 per person. Budgeting Babe reposted the article. I was disappointed that on all of the personal finance blogs I read, nobody really got into what they were spending per person.
So brings us to the crisis portion of this holiday's gift-giving. I'm worried that we are being too stingy with our christmas gifts this year. I don't want to jip anyone, but I can't help thinking that $75 per person (in my case, that would be $750) seems excessive.
According to the US Census Bureau the real median income for American households these days is about $46,326. That means most people spend .16% of their gross income per christmas gift. Because of our joint incomes, we are making much more than the average American household. However, what we are actually living on (and not saving) is significantly below both our income and the national household income. So if I wanted to give everyone a fair gift based on a percentage, do I use what I actually allow myself to spend or the gross?
And anyway, that formula is based on Most People. And Most People aren't saving nearly as much as they should, so they can't be counted on to give reasonable christmas presents. Which is why I was curious as to what financially responsible people usually spend.
In My Open Wallet, Madame X spent about $45 on a gift for a parent. That seems reasonable to me . . . not nearly as heart-stopping at $75.
I guess the potential backlash here is that people are going to think I don't care about the sentimental value of the gift. Let me premptively strike those thoughts from your mind: every financial article on holiday gift-giving worth it's salt says to make a budget and stick to it, and I DO care about what I'm giving to people. I try to support local business, buy items that are earth-friendly, AND keep the recipient's desires in mind. I just want to make sure my gift budget isn't going to offend anyone, or put me on the wrong side of frugal vs. cheap.
Of course, anyone who would make a snide comment about a well-intentioned but modest gift probably didn't deserve the gift in the first place.
So I guess I'll stick with my $30 rule this year. (Though I might get something a little nicer for our parents.) Maybe I'll bump it up some next year.
(Here's how Divorce to Financial Freedom handled the same christmas dilemma.)
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I think this goes without saying but I'll say it - it's the thought that counts. Whether you're spending $30 or $300 per gift, if it's not something useful or meaningful to the other person, it's just another re-gift to them. So I say stick to your budget. You shouldn't have to go broke for other people just because they might look the proverbial gifthorse in the mouth.
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