How to Budget for Gift Giving in a Large Family

Creative ways to save and plan for gift-giving throughout the year.

girls opening presents

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We don't have to tell you that merely having children is an expensive endeavor. There’s food to buy, health costs to cover, everyday necessities such as bedding and school supplies to pick up, and of course clothes and shoes that feel like they need to be replaced every six months as your kids grow, grow, grow.

All these expenses are in addition to the cost of gifts given throughout the year, be they birthday, surprise, or holiday-related presents. Though not essential, gift-giving is an ingrained cultural act and a way to demonstrate and celebrate our love, care, and affection for others.

These don’t have to be extravagant purchases, but usually, there’s some dollar cost associated with them. Should you be part of a large family with numerous children, gifts suddenly feel more like a burden than the joy they’re meant to be.

Fortunately, there are many ways you can help budget and plan for gift giving in a large family that alleviates much of the financial stress. The advice below will help you navigate that more effectively throughout the year and in the many years to come.

How Much Money Should You Spend?

The answer to this question wholly depends on your family's needs and varies depending on your financial situation.

A good rule of thumb is to allocate approximately 1% to 5% of your income to gift-giving depending on your preferences. This applies to the total spent on gifts — not a per-person or per-child gift. 

For instance, that means if your household income is $60,000 then a perfectly appropriate amount to spend on gifts throughout the year is $600 to $3,000. Of course, you can adjust this amount according to your current financial situation and how much you prioritize gift giving.

Ultimately, though, you should never feel like you’re teetering on the edge of financial ruin, and you should always prioritize everyday essentials and bill payments over spending money on gifts. We recommend subscribing to Gonzalez’s motto, “Get creative, don’t get into debt!” when it comes to gift-giving.

“The ages of the kids are very important, as kids’ gifts tend to get more expensive as they get older. This is why, after you've determined your overall budget, rather than evenly dividing it between your children you should focus on buying age-appropriate gifts for each child,” advises Jill Gonzalez, a financial expert, and analyst for Wallethub. “The main thing to keep in mind is staying within the overall budget, even if you don't allocate an even amount for each kid.” 

Creative Ways to Budget for Gift Giving

Defining how much is appropriate to spend on gifts is almost half the battle. Once you have a number (or a specific gift) in mind, it’s all about being strategic and purposeful about how to save up for said gifts.

Set Up a Separate “Gift Giving” Bank Account

Setting aside cash can help you compartmentalize your spending and keep better track of how much money is being allocated for what.

“Creating a separate bank account for your gift budget is a good idea, especially when you have more children or if you're considering buying them something more expensive,” says Gonzalez. “If you already know what gifts you'll be getting them, you can simply determine what amount will go into the account each month.”

Use a Money-Saving App

In lieu (or in addition to) a separate bank account, consider signing up for a reputable money-saving app. For example, Digit pulls small, unnoticeable amounts of money from your bank account and allows you to set up individual savings goals, and Acorns rounds up to the nearest dollar on all your purchases and puts the funds into a low-risk money-growing account.

Plan Ahead to Take Advantage of Sales and Discounts

"Thinking and deciding ahead on what you'll be getting your kids throughout the year can save you money,” says Gonzalez. “This is because you can track the prices and make the purchase whenever the items go on sale, which can happen at any time throughout the year.” Create a spreadsheet or simple checklist of the gifts you’d like to buy and consider setting up price-drop notifications at your go-to stores.

Buy Gifts Throughout the Year

A mistake people often make when buying gifts — especially when it comes to Christmas gifts for a large family — is buying everything all at once. Not only does this create financial pressure, but it also can turn into an emotional (and time-sucking) burden.

Purchasing gifts throughout the year can make your life much easier. If you see something that you think would make an excellent gift for one of your children, buy it and tuck it away until their birthday or the holidays.

Consider Purchasing a Shareable Gift

If you want your money to go further on a larger-ticket item then consider buying a gift that can be shared by multiple children. For example, this could be a new video game console, a collection of books, a piece of play equipment for the yard, or a weekend getaway enjoyed by all.

Use a Rewards Credit Card Throughout the Year

“Another way to budget for gifts for a large family is to apply for a rewards credit card and use it for purchases throughout the year,” advises Gonzalez. “Points will accrue on the card and, throughout the year, you can redeem them to buy gifts for your kids." 

Use Gift Cards to Purchase Gifts

If you’ve been gifted gift cards (or even cold hard cash) throughout the year, considering putting them toward the purchase of gifts for your children. You can do this with any sort of unexpected income.

Make Everyday Essentials the Gift

There’s only so far you can take this idea — a box of toilet paper isn’t going to cut it, and socks are pushing the line — but there are many instances when an everyday essential can double as a wholly welcomed gift. For example, a cute mittens and hat set, a pair of pajamas, clothing, or a new comforter for their bed.

Make the Gifts Yourself

“If you’re short on cash, a great way save money on gift-giving is to make the presents yourself,” says Gonzales. Not only will this cut down on costs, but it’ll ensure your gifting something personal and one of a kind.” For instance, a hand-knit sweater, play dough, a quilt, or a gift basket you’ve put together yourself. 

Remember that Second-Hand Gifts are Perfectly OK

Gently used second-hand gifts are perfectly acceptable. There are many excellent deals to be found at thrift shops, on eBay, and reselling apps such as Facebook Marketplace or OfferUp. Many of these are still wrapped or tagged or otherwise like new.


By Wendy Rose Gould
Wendy Rose Gould is a lifestyle reporter with over a decade of experience covering health and wellness topics.