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

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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.

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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?

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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.