The 4 Gift Rule for Christmas – The Secret to Family Holiday Joy

4 gift rule at Christmas

4 gift rule at Christmas

Will the 4 gift rule work for our family this Christmas?

That was the question I asked myself a couple years in to our parenting journey. We now have a 4 and a 2 year old who have toys spilling out of every available space in our home.

Christmas, birthdays, and even other holidays like Easter or Valentine’s Day, can bring an overwhelm of gifts for our kids. The 4 gift rule for Christmas framework has significantly reduced the chaos in our home around the holidays. And honestly it has increased our children’s joy and happiness as the focus has shifted away from opening ALL THE THINGS, to being together as a family and actually spending time exploring the gifts they did get.

All that to say, the 4 Gift Rule transformed my family’s Christmas traditions. But before I get to that, let’s set the scene…

How Much Do Families Spend on Christmas? (Hint: A LOT)

Did you know that the average consumer spends over $900 on Christmas gifts? Or that total annual holiday spending in the U.S. is more than one trillion dollars?!

It’s no secret that the retail marketing machine has long ago taken over the holidays. What is supposed to be a relaxing celebration with friends and family has been turned into an opportunity to squeeze a few more dollars out of you, the consumer.

The costs extend even beyond Christmas gifts. LendEDU did a poll of what people expected to spend on Christmas, including gifts, travel, decorations, etc. Below is a graph of their results. Interestingly, their figure of $633 is less than other data suggests of actual spending. Perhaps people are not accounting for all of their expenses? I know I always end up spending more than I expected.


The Anxiety-Inducing Rules of Christmas Shopping

I find myself caught in the trap of Christmas gift-giving every year.

I’m not a gift person by nature, which makes the whole process all the more stressful. As the emails and texts roll in with “what do you want for Christmas?” I have to wrack my brain to figure out what I want that I don’t already have, and inevitably I end up offering a weak suggestion for a gift card for this or that, feeling slightly guilty but also relieved that I can stop trying to artificially manufacture wants and needs.

It works the same way in the other direction too, trying to figure out what I can get my friends and family that will be thoughtful and useful, with just a touch of frivolity.

Maybe you’re not quite like me and you love giving and receiving gifts. More power to you – I admire those who have the gift of gift-giving and wish I could be you.

Even if you love the process, it is clear that we as a society are putting ourselves further and further in debt in the pursuit of a consumerist view of the holiday season. Over half of Christmas shoppers admit that they go into debt buying gifts for others. And if you asked them why I bet you would get a puzzled look – “that’s just what we’re supposed to do!”

While everything and everyone else is pushing you to spend, spend, spend this season, I want to give you permission to STOP THE MADNESS.

Related: Best Seasonal Jobs to Make Extra Money During the Holidays

The 4 Gift Rule: How to Stop the Madness

A few years ago, I learned from a friend of mine that she and her family narrow down the Christmas wish list to just 4 gifts:

  1. Something they want
  2. Something they need
  3. Something to wear
  4. Something to read

I thought this was genius – not only does it eliminate a lot of the “stuff” you accumulate, but it gives a useful framework for gift giving ideas. Now when my wife and I are out shopping for the kids, it’s easier to narrow down the list and make sure we are sticking to the budget and not going overboard. It also allows us to splurge on one or two big gifts that they will hopefully appreciate more than a bunch of small ones.

The Benefits of the 4 Gift Rule at Christmas

If your kids are still young, now is the perfect time to establish this routine. For our kids, right now they just love tearing open paper and playing in boxes. Maybe “something they want” can just be an empty wrapped box!

For older kids, the 4 gift rule can help teach them an appreciation for gifts and the meaning behind the giving. The beauty of this system is it allows you to give quality gifts that they can really appreciate, without overwhelming them with stuff.

When our kids get a bit older, hopefully it will be a good conversation topic to talk about why we decided to be intentional with the number and type of gifts when they compare themselves to what their friends get. I want to be able to teach them good money habits at a young age, leading by example. And more importantly, I hope we get to talk about other kids who are less fortunate than us, and help them pick out gifts to give to others.

While you can still go overboard with the 4 gift rule, it does make it significantly easier to stick to a budget. You won’t constantly be finding “one more thing” you need to buy, as you know you need to make each gift count.

Related: Why Should We Tithe? The Compound Giving Effect

4 Gift Rule Ideas for Your Family

If you need a little help figuring out what to get for your kids that falls within the 4 gift rule challenge, below are some ideas for different age ranges.

4 Gift Rule for Infants and Toddlers

  1. Something they want: If your kids are like mine they were showered with an overabundance of toys before they were even born. But getting a nice, quality toy (we like Melissa & Doug) is always a good idea.
  2. Something they need: Add to or start an investing account for their future.
  3. Something to wear: A new pair of pajamas. How do we never have clean pajamas with no holes in them? Just us?
  4. Something to read: Anything that helps them learn words and sounds with fun pictures. Here are some ideas.

4 Gift Rule for Grade School Kids

  1. Something they want: A bicycle, or art supplies for the creative types.
  2. Something they need: A new backpack and school supplies (kids seem to always need school supplies…)
  3. Something to wear: Those trendy jeans they’ve been begging for.
  4. Something to read: I remember I was big into book series as a kid (Redwall anyone?) Harry Potter, Chronicles of Narnia; there are so many good choices.

4 Gift Rule for Teenagers

  1. Something they want: I’m not there yet in the parenting journey, but I’m betting I will fold and get my teen a smart phone.
  2. Something they need: Continuing the electronics theme, a laptop for school work.
  3. Something to wear: Good luck picking anything they would like. Gift card to the rescue!
  4. Something to read: A Kindle gift card so they can pick out their favorite book or graphic novel.

Wrapping Up – Make the 4 Gift Rule Work for You

The whole point of the 4 gift rule is to be a little more intentional and selective in your gift giving (and hopefully make it easier to stick to a budget). We don’t rigidly adhere to the formula every single year. Do what works for you. For example, maybe you want to take the whole family on a special trip in place of one or more gifts. Sometimes experiences together are the best gifts you can give.

And nothing in this article talked about how much you should spend. That will change based on your situation and your budget. But hopefully this gives you a framework to help you be a better gift giver on any budget, large or small.

What about you? Have you tried the 4 gift rule or something similar? How did it go?


how to use the 4 gift rule of christmas to save money

4 Gift Rule Pinterest 6 - The 4 Gift Rule for Christmas - The Secret to Family Holiday Joy
4 Gift Rule Pinterest 5 - The 4 Gift Rule for Christmas - The Secret to Family Holiday Joy

Andrew Herrig is a finance expert and money nerd and the founder of Wealthy Nickel, where he writes about personal finance, side hustles, and entrepreneurship. As an avid real estate investor and owner of multiple businesses, he has a passion for helping others build wealth and shares his own family’s journey on his blog.

Andrew holds a Masters of Science in Economics from the University of Texas at Dallas and a Bachelors of Science in Electrical Engineering from Texas A&M University. He has worked as a financial analyst and accountant in many aspects of the financial world.

Andrew’s expert financial advice has been featured on CNBC, Entrepreneur, Fox News, GOBankingRates, MSN, and more.

11 thoughts on “The 4 Gift Rule for Christmas – The Secret to Family Holiday Joy”

  1. Great “tool” to use to help with Christmas ——this season is almost here, and my wife and I have talked about this problem at length. You’re on the path that will help many ——– The “4 gift” rule is perfect for us. We have 2 grandkids and a 3rd coming in early March ——so, I appreciate the simplicity here, Andrew.

    Good luck with your new BLOG ——I’ve read most of what you’ve written and I can tell you are SMaRT, full of passion for helping others and a creative writer. Under NEED —– I think we’re going to start a 529 fund for each grandkid so we can help them YEARS from now too ——- Yes! Legacy Planning ——-

  2. I’ve heard this before and really want to try it with niece and nephews. What we usually do is experiences. We buy an experience sometime throughout the year and get an entire day to spend with one another versus just one big item.

    • That’s a great idea too. I’ve done that the last few years with my nieces and nephews – taking everyone to a movie, or theme park, or something like that.

  3. I come from a big family that always comes together for Christmas, but luckily we’ve always been tame about gift-giving — only for the kids, no adults, though we do the White Elephant game for the adults. It’s amazing how excited grown people can get about a random pile of gifts (and I count myself in that excitable group!).

    • My extended family started doing the white elephant exchange a few years ago. I agree – it’s a lot of fun, and you don’t end up with a huge pile of stuff at the end!

  4. Love this idea. Thanks for the great tips. I love how this rule works well with decluttering. We have been decluttering our home for the past two years and this approach to gift giving minimizes the amount of “stuff” that enters our home. Great post!

    • Yes! We also have a “one in – one out” policy for toys. Our house is on the smaller side, and keeping the house organized (or at least hiding the clutter) is difficult after the holidays.

  5. As the parent of 3 spoiled adults, and 7 REALLY SPOILED grandchildren, I would relish being able to actually ENJOY Christmas and dismantling the anxiety of shopping, wrapping, then the expected returns of the enormous mountain of gifts that is our home! My children can’t even transport all the “things” that was bought for their family. Now how silly does that actually sound?
    I can’t wait to adopt this transformative experience!
    Thank You is not enough!!!

  6. Ah, I used to love reading Brian Jacques’ novels. Cordial anyone? Great tips for gift giving as well. It certainly takes off some of the eyes.


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