Buying gifts for your kids can be a challenge. You want to give them presents they’ll enjoy, but you don’t want to overwhelm them or overspend. The average American spent roughly $1,000 on holiday shopping in 2021.
Without a plan for what Christmas presents your children want, it’s easy to overload them and potentially blow your budget. The 4 gift rule is a solution to save money while creating a memorable holiday season.
This guide shares how to use it in your home.
Table of Contents
What is The 4 Gift Rule for Christmas?
The objective of the four gift rule is to avoid debt while purchasing presents your kids will enjoy without becoming overwhelmed.
Here’s how it works:
| Rule |
|---|
| Buy them something they want |
| Buy them something they need |
| Buy something for them to wear |
| Buy something for them to read |
These categories allow you the flexibility to buy a present or two your child(ren) will love while not going over the top. They can still give you a list of gifts they’d like to have, allowing them to ask for things they want.
It may feel odd to limit the number of gifts you buy your children, but you can think of it as a way to be responsible in your purchases and model good money habits to your entire family.
Ultimately, it shouldn’t impact your holiday traditions. Instead, it will enrich them as you focus less on the quantity and more on the quality of the gifts. Here are some Christmas gift ideas for kids in the four different categories.
Something They Want
This is a present your child chooses and likely is the big gift they will receive. As your children get older, you can ask them for a list of Christmas gift ideas to get an idea of what to purchase.
Younger children will likely want a special toy. You can use Amazon to find a suitable one. Older children may ask for a new bike or a cell phone.
If you have multiple children, you can even purchase a larger group gift if there is something they all want.
Something They Need
Depending on the age of your child, this item can be selected by them or you. If you pay attention to your child, it’s likely obvious what they need. Here are a few ideas to consider:
- A new coat or jacket for your toddler
- An investing account (SoFi Invest is an excellent option with no fees required)
- The musical instrument they’ve been learning in school
The ideas are endless, and the item you choose doesn’t have to be expensive.
Something to Wear
Something to wear may overlap a little with a need, so make sure you buy one item for each category. This purchase can be as simple as dress-up clothes for your toddler daughter.
It could also be a new pair of sneakers for your teenager.
**Related – check out Amazon’s Holiday Gifting Hub for deals on gifts for your family!**
If your child likes to pick their own clothing, you can give them a gift card to their favorite store.
Something to Read
Books are an excellent addition to any gift-giving. If your child loves to read, this option lets you give them two gifts they want for the price of one. If you have a young child, you could choose a set of Dr. Seuss books.
If you have an older child, books from their favorite author or something like the Harry Potter collection might be appropriate.
Don’t forget to use Capital One Shopping (formerly Wikibuy) if you’re buying gifts for your children online. The browser extension identifies active coupon codes to help you save more on your purchases.
The extension is free to use and even helps you compare prices to find a better deal and maximize your Christmas budget.
Does the 4 Gift Rule Work?
The holiday season is a fun time. Presents are a big part of the enjoyment. When you tell friends and family about buying 4 gifts for Christmas for your children, they may think it’s restrictive or miserly.
Like many things in life, shopping for Christmas gifts for kids is a personal decision. Explain the “why” behind your decision so that your loved ones understand why you are following the rule.
Some family members may appreciate it if they are also shopping for multiple children. Communication is vital to ensure everyone is on the same page.
You can also ask them to contribute to your child’s college fund rather than spending too much on gifts. This allows them to buy something special while putting some money to better use.
How to Explain the Four Gift Rule to Children
It is important to communicate with your children as you give gifts. This doesn’t mean you make them an equal player as you decide on your gift budget, but you want to be transparent.
Children are sponges, especially younger ones, and they’re surrounded by people from different backgrounds. They may have friends who receive dozens of gifts. They may also have friends who receive far less.
Use this as a time to teach them about being thankful during the holiday season as well as being mindful about spending. Include them in the process and let them know they will still receive good Christmas gifts they will love.
This helps them look forward to Christmas morning without feeling bitter. If they have grandparents or other family members, remind them that it’s likely they will receive more than four gifts.
Additionally, it can be another opportunity to explain that it’s the thought that matters, not the number of gifts received.
Benefits of the 4 Gift Rule
There are several perks of using the four gift rule for Christmas presents. The obvious benefits are that it helps you control spending and avoids setting up your children to expect they will receive tons of gifts.
Other perks include:
- It’s green: If you have a child, you know how many gifts come with a lot of packaging. This is especially true with toys. Buying fewer gifts means less plastic and junk end up in landfills.
- It’s less clutter: It is fun to have a house full of Christmas presents. However, more presents create more clutter. Indirectly, the four gift rule lets you maintain a smaller house.
- It doesn’t overwhelm your children: I’m particularly motivated by this benefit. My husband and I have twins who are toddlers. A lot of presents would overwhelm them.
Overall, the philosophy helps you manage buying Christmas presents for kids that they’ll enjoy without overspending. It’s a win-win.
What is the 3-Gift Rule?
The three gift rule is a variation of the popular four gift rule. The philosophy models itself around the three gifts given to baby Jesus by the Three Wise Men or Magi.
The 3 gift rule offers a little more flexibility in what to get for Christmas presents. You can set what categories fit your children best, and you can establish any budget you wish.
What is the Five Gift Rule for Christmas?
The 5 gift rule is another variation of the four gift philosophy. Instead of just setting different categories like the three gift variation, you use the same four. These include:
- Something they want
- An item they need
- Something to wear
- A book to read
The fifth category is a wild card. You can make it whatever you wish. It can be another item your child really wants, or it can be an experience.
If you have multiple children, you can make the fifth gift a family-wide gift like an item everyone wants or an experience the entire family would enjoy. The only limitation is your budget.
Remember, the idea is to be purposeful in your holiday spending while having the flexibility to be creative.
Do You Also Follow the 4 Gift Rule for Stockings?
Stocking stuffers are a fun addition to any Christmas morning. They can even be some of the best gifts for children. But, it’s also easy for stockings to go overboard.
My recommendation is not to make stocking stuffers one of the four gifts. However, you do want to be purposeful with this purchase if you implement it. Amazon has a helpful page with stocking stuffer ideas to use for inspiration.
You can purchase one meaningful gift to put in their stockings, such as a card game or action figure. Like any holiday purchase, personalize it for your child.
You can even make them something homemade if you have the skill and your child would enjoy your creation.
How Many Presents Should a Child Get at Christmas?
Buying Christmas gifts for your children is fun. They’ve thought for weeks or months about what they want. Creating a magical Christmas morning is a memorable experience.
Experts differ in terms of the recommended number of gifts a child should receive during the holidays. Some support the four gift idea, while others suggest no more than ten.
The number is less the issue than staying within a budget and setting your child up for success. Going overboard may create the idea that it’s best to receive a lot of gifts.
It may also show them that spending doesn’t matter as long as you get what you want. You need to find a balance and use purchasing gifts as a teaching opportunity for your children.
Bottom Line
It’s fun to spoil children, but it comes at a cost. The four gift rule allows for some splurging while also practicing focused spending.
This lets you buy good gifts for your children and teach them the importance of not being overly materialistic. That’s a valuable life lesson they can use for years to come.
Do you have a method you follow to stay within budget on your holiday spending?
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Catherine Alford is the go to personal finance expert for parents who want to better their finances and take on a more active financial role in their families.
