The 4 Gift Rule: What It Is and How to Use It This Christmas

Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.

The 4 gift rule for Christmas helps you save money and still get your kids fun presents. Here's how the four gift rule can simplify shopping.

Every year, parents struggle to decide what to buy their kids for Christmas. It can be challenging to find or afford the perfect gift. It can also be easy to lose sight of your budget when you’re shopping.

The average American family spends $1,000 on Christmas presents. As a result, it’s not uncommon to overspend on gifts.

Do you want to reign in spending while giving your children a memorable holiday season? The 4 gift rule can help.

What is The 4 Gift Rule?


The 4 gift rule has been circling the internet for years. The idea is that you only buy your children four gifts for Christmas. This helps simplify shopping, keeps you on budget, and prevents your kids from being overwhelmed by gifts.

Implementing the four gift rule is easy. You simply purchase one gift from each of the following categories: something they want, need, wear, and read.

This may sound similar to the 3 gift rule, which is when each child receives three gifts to symbolize what the three wise men gave to baby Jesus.

The 4 gift rule a terrific way to teach your children they can’t have everything while still allowing them to receive gifts they enjoy. It also lets them learn the life lesson that material possessions don’t bring happiness.

The best part is that it allows you to stay on budget.

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 things they want for Christmas.

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.

Ask your children for ideas to maximize their excitement.

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
  • Open an investing account (SoFi Invest is an excellent option with no fees)
  • The musical instrument they’ve been learning in school

The ideas are endless. 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 great gifts. 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 helps you identify active coupon codes to help you save more on your purchases. The extension is free to use, and also helps you compare prices to find a better deal.

Benefits of Using the Four Gift Rule


There are several benefits to using the 4 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 every holiday season.

Other benefits 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.

Instead of buying many gifts, we prefer focusing on a few items. This allows them to get more out of fewer presents instead of showering them with tons of gifts that won’t get as much use.

Do You Still Need A Gift Budget?


You need a budget for all of your spending, regardless of if it’s for the holidays or not. The easiest way to stay on budget for holiday spending is to budget for it year-round.

For example, if you plan to spend $600 during the holidays, you should save $50 each month. This lets you avoid going into credit card debt and still allows you to buy good Christmas gifts for your children.

Should your Christmas spending budget differ any when using the four gift rule? The answer is yes. The rule should help dictate your holiday spending.

Following the rule helps you avoid overwhelming your children with gifts. It also allows you to save money. You get to keep more of your money to spend on the needs of your family without completely cutting back. This win-win scenario benefits the entire family.

Remember, use Capital One Shopping to find coupon codes to help reduce out-of-pocket costs.

Capital One Shopping
Save more when you shop!

Snag better prices automatically on the things you buy with valid discount codes.

Get Started

capital one shopping


What About Grandparents?


Most grandparents love to spoil their grandchildren. It’s easy for grandparents to go overboard if you don’t set reasonable expectations.

Let your parents know you’re following the 4 gift rule for Christmas presents and ask them to abide by your wishes. It’s best to work with them so your children get the right mix of items.

The beauty of the plan is it allows for flexibility. That can mean the grandparents buy one of the items, such as the toy your child wants, and you can purchase the other gifts. Each family is different, so adjust your plan to meet your needs.

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 using the four gift rule, they may think it’s too restrictive or miserly.

Like many things in life, shopping for Christmas gifts for kids is a personal decision. Communicate the “why” behind your decision so your loved ones understand why you are following the rule. Some family members may appreciate it if they are also shopping for multiple children.

Others may feel bitter about the idea that you’re restricting their ability to give. It’s important to choose your battles, but communication is essential. If a family member asks for a list of gift ideas for your children, provide them with just a couple of items.

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.

My husband and I have found making sure all family members are on the same page works best. We have used the four gift rule for several years. It only takes a little work to be successful.



Children are more expensive as they get older. However, there’s not much else you would get your children outside of the categories in the 4 gift rule. This makes it easy to manage holiday spending.

The four gift rule covers all the bases and limits you from going overboard. The best part is that the philosophy allows for some nice splurges while protecting your budget.

It’s fun to spoil children, but that comes at a cost. With focused spending, you can give them a memorable holiday season. You can also teach them a few important life lessons.



Would the 4 gift rule work for your family? Do you have a method you follow to stay within budget on your holiday spending?

*Capital One Shopping compensates us when you sign up for Capital One Shopping using the links provided.

You are being referred to SoFi Wealth, LLC’s website (“SoFi Invest”) by Frugal Rules and Ink Harmony, LLC, a solicitor of SoFi Invest (“Solicitor”). The Solicitor that is directing you to this webpage will receive compensation from SoFi Invest if you enter into an advisory relationship or into a paying subscription for advisory services. Compensation to the Solicitor may be up to $1,500. You will not be charged any fee or incur any additional costs for being referred to SoFi Invest by the Solicitor. The Solicitor may promote and/or may advertise SoFi Invest’s investment adviser services and may offer independent analysis and reviews of SoFi Invest’s services. SoFi Invest and the Solicitor are not under common ownership or otherwise related entities. Additional information about SoFi Invest is contained in its Form ADV Part 2A available here.


The following two tabs change content below.
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.


  • Vanessa D. says:

    When my boys were small they received far too much at Christmas. Their other Gramma spent a wad every Christmas, so our house tended to look as if the Wal-mart toy section had vomited everywhere by the time it was finally over. It was absolutely ridiculous.
    The first year I was separated from their father was easy – we split the cost of buying them each a Gameboy and that was their main gift with a few filler items purchase separately.
    After that it was hard. My tree always looked naked to me, as if there were hardly anything there but I stuck to my guns and kept reminding myself that they would get an entire second Christmas with their dad and how many other people would be buying them gifts.
    Now I have a 23 and 19 year old who are truly appreciative of the things they receive. They each get 2 pairs of pajama pants, some boxers and socks along with a stocking of their favorite toiletries and a chocolate orange. Then there is usually something nice that they need or really want, even if that happens to be a gift card so they can choose their own clothing and that is it.

    • Cat@BudgetBlonde says:

      Yes my husband is also sad that the tree is naked underneath. I recommend wrapping fake presents for decor purposes. 😉

    • Carly N says:

      Ok I’d like to implement the 4 gift rule this year but how does this work with also having Santa? Do you really only get the kids 4 gifts a piece including Santa or is this just the gifts from the parents? I’d like to keep the Christmas budget under control this year as we now have 4 children.

      • John Schmoll says:

        I’d say it depends on your situation and what you want to do. We have three kids and they already get so much from family that it makes it relatively easy to still stick by it, even including Santa.

  • Jon @ Money Smart Guides says:

    I never heard of the 4 gift rule.

    When I was growing up, my paternal grandfather gave the grandkids money for Christmas, but I didn’t know he did this until I was a teen. My parents would take the gift every year and invest it into a mutual fund for college.

    Looking back, this was the best gift of all. When we have kids, I want to make it a point to give them a gift of money into a mutual fund/ETF to help them learn about and understand money. Of course, I will still get them some fun stuff to open, but the lesson of good personal finance is more important.

  • Robin says:

    It is exactly what we are doing this year. our daughter is three, and I want to get her started early so she doesn’t expect a thousand presents each Christmas.

  • Brian @ Debt Discipline says:

    I think this could work for us. There is a lot of wiggle room with the 4 gift rule. We set a budget amount per child and stick to it.

  • Holly@ClubThrifty says:

    My kids are getting more than four gifts this year. Not a whole lot more, but definitely more than four. I think that’s a great strategy, though. Many kids in this country have everything they could ever want and more- there’s no reason to buy kids more than they could ever wear or play with.

  • Mrs. Maroon says:

    We found this idea a couple weeks ago and loved it. We were instantly on-board. We’ve been working hard all year to focus on the fact that stuff (read: junk, crap, or any other choice four-letter word) is not important. So this seemed perfect for Christmas. Past history has told us that our families like to go overboard, so we asked them to do the same. We got a WEE bit of resistance. My favorite was “it’s my money and I’ll spend it however I want!” Mini Maroon #1 is almost three. We feel like this is our critical year to set the expectations for Christmas many years down the road. I’m very anxious to see how everyone follows the requests. It’s almost here…

  • Andrew@LivingRichCheaply says:

    Yea our little one is still at the age where he doesn’t really care what he gets…he’s much happier playing with plastic containers. So I’ll enjoy this time for now. I’ve never heard of the 4 gift rule…what happens if other people get them presents?

    • The Roamer says:

      It still keeps the count down even if other people get them gifts.

      I think the 4 rule is a nice baseline but I was pretty disappointed with the examples. It started off good at the young ages but as they got older things got out of control.

      The statement kids get more expensive as they get older is just false. The sneaker example was also troubling. Do your values go out the window on Christmas? If you swore to never buy them I assume it for a reason. Like a brand name product who’s cost is all tied up in a name and who’s value isn’t reflected in the price. These sneakers aren’t a better idea or a good purchase just because it’s Christmas.

      It really seemed like all the last examples where things the kids wanted as appose to just meeting needs.

      Again just an good rule of thumb to consider but you still have to keep yourself in check I’m sure its still possible to spend over $500 on 4 items if you don’t stay aware of the over all message

      • Cat says:

        Ah you know, they were just examples. And no, values don’t go out the window at Christmas. Again, just an example. I think it’d be fun to surprise your kid with a gift you swore you wouldn’t buy – something you said no to all year but were secretly saving up for the whole time – that sort of thing.

      • Sarah texidor says:

        I agree. This year we are giving one gift from each member to one another to show our love and thotful ness. We have 3 kids so each kid will get 5 presents in our family each are getting new bedding to keep warm. And 4 items that each of us have picked. Nothing over 30 dallers.

    • Cat says:

      Ah you can’t stop grandparents from going cray cray. That’s why it’s just not really worth it to buy so many things yourself etc. 😉

  • Money Beagle says:

    I like this one a lot. I might have to tag this for future years as I think it could apply for many different people and exchanges. Thanks for the idea!

  • Mark@BareBudgetGuy says:

    I love this! I’d never heard it before. We’re pretty much set this year, but this is an excellent guideline I may use for next year.

  • Kim says:

    I’ve never heard of the 4 gift rule, but I like it. Our daughter has more than 4 gifts this year, but all the stuff she asked for was cheap. I’m sure that will change as she gets older.

  • How To Save Money says:

    Cool idea! I think this would work for me. Personally, I don’t like giving expensive gifts because I think children grew out of toys very fast. So 4 gifts would not cost that much..

    • Cat says:

      Oh yeah. I mean yesterday my son played with an empty toilet paper roll all day so there you go. 😉

      • Cassidy Kae says:

        My girls are 4, and last year, they got 5, plus a few stocking stuffers. Do you guys think that’s enough?

        • John Schmoll says:

          I think that’s definitely enough Cassidy. We have a 9, 7 & 4 year old and we’re in the 4-6 gift range, along with a stocking stuffer or two. Not knowing your situation of course, but when you begin to add in some gifts from grandparents/other family members the gift total can really begin to add up.

  • Jayson @ Monster Piggy Bank says:

    That 4-gift rule is really helpful. I would say I would give something they need more that they want. Still, it depends though on the person. by the way, wait, why do teenagers need a new tablet or computer? Haha! That costs too much. They are kinda choosy nowadays.

  • Laurie @thefrugalfarmer says:

    I would definitely put the money in the college funds for the kids this year. They’ll get plenty of other gifts from extended family anyway. 🙂 We’ve done the 4 gift rule in the past, but now we just set a smallish limit and get a combo of stuff that they both want and need. As an example, our oldest is an artist, and goes thru a huge number of pencils and erasers on a monthly basis. Last year, one of the gifts we got her a 24-pack of her favorite expensive drawing pencils. This year, we got her a high quality electric pencil sharpener as one of her gifts. Getting stuff they want and stuff they need is a huge way to save on money during the rest of the year.

  • Lyndsey says:

    I love this idea! But how does it work with Santa gifts and gifts from siblings? Are the 4 just from mom and dad?

    • Cat says:

      It’s four gifts total. They are both 19 months old so they don’t know who Santa is yet and aren’t old enough to pick out something for each other yet. If I would have to guess for the future, though, Santa would probably bring 1 big gift, we’d do 2-3, and their sibling can have fun picking one out for them too.

      • Obsidianbabe says:

        4 gifts total?! Oh that’s total BULL for our family anyways..

        sorry, im doing the 4 gifts rule from mom and dad only being my 3 kids are 20, 15, and 6. They get more gifts from others, then awesome. That’s up to OTHERS like my mom who spoils her 5 grandkids, my sister and brother in law, and the kids grandfather.

        In our family, it isn’t about how many gifts, but about the budgeting. and hey, if my 20yr old and 15yr old don’t appreciate the need or want item, I figure, they are MORE than happy to stand in that blasted return line at Walmart on December 26th. I guarantee, it makes them appreciate the gifts a heck of a lot more because when they get older, no way am I standing in that line for them! 😉

        • John Schmoll says:

          I think you may be misreading her comment. 🙂 She’s saying 4 gifts total from her and her husband to each individual child, not four gifts total for each child from everyone.

  • Natalie says:

    I discovered The 4 Gift Rule late last year. I decided to start using it this year. With it in mind, I started shopping early:

    •I got my son a secondhand swing set. There is a broken trampoline attached. He always wants to play on it. That quickly became his WANT present. I got him a Little Tikes trampoline.

    •He’s 22.5 months old and is a sponge!!! He knows all of the colors, numbers 1-10, uppercase alphabet and most of the lowercase alphabet. To keep him on the education path, his NEED gift is a 9-pack of puzzles (think: Melissa & Doug) with a puzzle rack.

    •I bought his WEAR this summer. It’s a pair of Cookie Monster shorts pajamas. We live in the south where some Christmases are warm while others are cold. I’m going to add a pair of Thomas & Friends long-sleeve pajamas just in case the weather is cold.

    •Kohl’s has books for $5 as part of their Kohl’s Cares line. He looooooves books, so I got him 3 or 4 the current offerings for his READ, plus 3 or 4 of the past books (If you give a pig a pancake, If you give a moose a muffin, etc). The past titles were only $3 each.

    Many people give 4 total gifts, I give 4 categories, so my son actually opens more than 4 boxes.
    I have had some people politely tell me how nice the 4 gift rule sounds, while a few others tell me Christmas is a time for me to go overboard on gifts (for my soon-to-be 2-year old). I just realize only 9 days after Christmas, he’ll be inundated with MORE presents from his birthday.

    So much for not raising an entitled brat!!! lol

  • ChrisAnne says:

    I have 2 children who are grown now and we always did 3 gifts for them. One from mom, one from dad, and of course one from Santa. My son and daughter have a total 4 daughters and they both liked this idea when they heard about it. Actually my daughter had thought this is what I had did with them growing up…. 🙂

  • Jessica says:

    I heard about the 4 gift rule earlier this year and I think it’s great! My husband and I have 5 kids between us, so, you can see that can get very costly. We have always worried about how we are going to afford Christmas.
    When I was little we were showered with gifts, so many, too many really! So naturally I thought I should do the same with my kids… But we couldn’t afford it.
    I worry that my kids will think they aren’t getting enough but, I always tell them to appreciate what they have, some kids get nothing!
    I have read, also, about the Christmas eve gift… With the pair of pajamas, hot cocoa, popcorn, & a book &or movie! I think that we will do that this year! And then they can open gifts from Santa in the morning! (Even though 3 out of the 5 don’t believe anymore)
    P.S. Thank you to whomever suggested the $5 books you can get at Barnes and nobles!

  • Jessica S. says:

    Nice idea, however that list is definitely not even close to frugal! A cell phone, laptop, vlothing gift card and books…that’s over a thousand dollars!! (Per kid)

    • John Schmoll says:

      “Also, remember the above suggestions are merely options. You can customize the four gift rule to your budgetary needs and particular situation.” – I see your point though you apparently didn’t read the last few sentences…you customize it to your situation and they’re only suggestions. The whole point is you make it what you want…which is going to be different for each person!

  • Stephanie says:

    This rule sounds great to me. I’m a grandma on soc.sec. and I love to spoil the little ones. But this year the grand total for grandkids and great grands is 15 so it would be very pricey. The 4gift rule will help me keep a handle on things.

  • Leigh says:

    I implemented this last year when my boys were 2 and 5 and I thought it was great. My mom loves to overload on Christmas, so I compromised by giving the four to each of the boys and then 2 big gifts they could both share. I didn’t feel like it was “sparse” under the tree. I feel like it’s so worth it to cut out the filler junk and stick to good, quality gifts that my kids will play with all year. The big “want” gifts ended up being a big excavator toy for the 2 year old and a big box of legos for the 5 year old. And they shared a set of Gears (Learning Resources) and Magnatiles. Eleven months later, the legos and magnets are still played with almost every day and the gears are pulled out probably once a week.

  • GirlErrant says:

    I’ve adapted the rule to:

    Something you want (Lego/Shopkins)
    Something you need (Hats)
    Something to share (water slide and a digital camera)
    Something to read (Black Beauty and The Jungle Book, hardcover)

    I find it harder for me to stick to it than for them to be happy with it!

    AND – I cheat. They still receive gifts from relatives AND some smaller bits from from Santa.

  • Angie L says:

    We altered it just a bit because none of my kids need anything to wear. So they are each getting something you want, something you need, something to play with, something to read. I have 4 daughters and the play withs are: canvas and paints (11 yo), quick cups game (6 yo), playdoh set (4 yo) and haven’t found anything for my 17yo but thinking an art set. The also get a gift, book and filled stocking from Santa.

  • Vicki P says:

    We began three-gift giving for Christmas, just as the Christ-child was given three gifts. The children were happy with their gifts and we could give to other families who were in need.

  • DC @ Young Adult Money says:

    Gosh it’s pretty incredible how many gifts certain kids get these days, all while other families struggle to get any gifts for their kids (random thought). I think this is a good rule to follow, though I think it wouldn’t work great once your kids know how $ work. For example what if “something they want” is 5 things at $20, and their sibling it’s one thing at $100? Not that it’s all about the money, but I think setting a budget is good, especially once kids understand money.

  • Ann says:

    I am looking for frugal ideas for Christmas gifts for my 4 children. I have spent a number of years fighting a bad cancer diagnosis, so we have never been able to give much for Christmas. But this year, due to some complications, we cannot do anything. We don’t have an extended family to rely on for giving the kids gifts. I am stressing searching for ideas for anything I can give them this year. I would appreciate any ideas that you have. Thank You!

    • John Schmoll says:

      Hi Ann,

      So so sorry to hear that. I wish I had the perfect answer to give. Some ideas…do you have any secondhand stores for kids in your area? We do and they often have toys at a significantly reduced price. One other option, and not meaning to offend here, have you approached any churches or other charitable organizations? Don’t know that they would help, but definitely worth the ask.

  • Montanna Washburn says:

    What about stocking stuffers? Do you do that or no?

    • John Schmoll says:

      We typically will Montanna. Then again, we typically spend very little on stocking stuffers – usually $5 or less.

  • Lucía says:

    Brilliant idea!! We have been doing this recently (our child is 2 and a half) but the problem comes with the rest of the family and some friends… both for Xmas and birthdays, we end up having 20 presents!! It just doesn’t make sense!!! How can we set some firm limits without offending these people?? The intentions are much appretiated but the whole experience ends up being extremely overwhelming and we definitely don’t want to raise our child like this!!

    • John Schmoll says:

      I know how you feel Lucia, we’ve ran into the same thing with our family – especially when our kiddos were younger. We finally just asked if we could provide a small list of things our kids wanted and have found that has really reduced the amount of gifts they receive to something more reasonable. We’ve also let them know it’s ok to give throughout the year/just give cash for some – allowing us to put the money in their respective 529 plans instead.

  • A good parent says:

    Nah it’s cool. I’ll be getting my kids more than 4 gifts for Christmas. If you want your kids to hate you, that’s your choice. They’re only kids once and I’m not going to ruin their childhoods because a short-sighted blogger told me to.

    • John Schmoll says:

      Ha ha, by all means, go ahead and shower your kids with presents if it means not ruining Christmas for them. After all, we all know that giving your kids everything they want is bound to set them up for success in life and absolutely no debt for you. Of course you know that since you’re searching for Christmas ideas in mid January… 😉

Leave a Reply

Your email address will not be published. Required fields are marked *