Budgeting For Gifts: 10 Tips To Make It Easy

By Zach Buchenau

Last Updated: July 1, 2021

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Want to get better at budgeting for gifts? Check out these 10 financial strategies to make gift-giving easy and stress-free!

If you’re like most people, budgeting for gifts is low on your priority list. 

After all, when you’re saving for an awesome summer vacation, retirement, your kids’ future education, and maybe even a dream kitchen remodel, budgeting for gifts just doesn’t seem that exciting. 

So why on earth should you bother creating a budget for gifts? Well, to put it simply, unplanned gifts can cause a lot of problems in your financial life. From financial stress to unnecessary credit card debt, not preparing for gift-giving can have some painful consequences.

Fortunately, with a little forethought and careful planning, you can avoid financial struggle when the holidays and other gift-giving occasions roll around.

In fact, here are 10 tips to help you budget for gifts and make your financial life much easier. 

10 simple tips that make budgeting for gifts easy and stress-free | Be The Budget

1. Open A Separate Savings Account (At A Different Bank)

There’s no limit on how many bank accounts you can have. For that reason, we recommend opening a savings account (at a different bank than you normally use) specifically for gift savings.

We call this isolating your savings account, and it is one of our favorite money-saving hacks.


Well, it makes it less convenient for you to dip into a savings account if you have to wait a couple of days for the money to transfer to your normal, everyday bank. And because it is less convenient, you will be much less likely to spend dip into your savings on an impulse, thus, ensuring the money is there when you need to buy gifts.

Even if you can only put $50 per month into a gift-giving savings account, that ends up at $600 per year.

I don’t know about you, but that feels a lot better than scrambling to find the money to buy gifts every year. 

It’s also much smarter and healthier than buying gifts on a credit card, as you won’t be subjected to interest and high monthly repayments.

 For a gift-giving savings account, we recommend the Axos High Yield Savings Account, as it won’t charge you any monthly fees, and comes with an interest rate much better than the national average. Plus, it only takes about 10 minutes to set up an account online.

2. Plan Ahead And Save Every Month

Although the cost of gift-giving varies from person to person and from occasion to occasion, you can work out roughly how much money you spend on gifts each year.

If, for example, you work out that you spent around $2,000 on gifts last year, you can use this figure to work out your annual gift-giving budget for the coming year. 

Divide $2,000 by 12 [$166.66] and set that as your monthly savings goal for your gift-giving account.

Depending on your pay cycle, you might find it easier to break it down into weekly payments. Just make sure to do it every time you get paid.

Then you need to have the discipline to only touch that money when you need to buy a gift for the holidays or another special occasion. (Once again, that’s why isolating your gift-savings account is such a good idea.)

Want to get better at budgeting? Check out a few of our other helpful guides:

3. Start A Side Hustle

Lots of people start a side hustle in order to save money for a particular goal. Whether you decide to start a blog, start freelancing on Fiverr, get a second job, or any other side hustle, any extra money you bring in can go directly to your gift-savings account. 

In particular, this is a great way to save up for Christmas, as you could leave your side-hustle earnings in your account until the beginning of December every year. This way, you have all that money to spend without having to worry about paying off credit cards or digging into your monthly budget.

4. Avoid Buying Gift Cards

While gift cards are a super easy gift idea, they’re also a little limiting.

When you buy a gift card for Amazon or another online retailer, you can’t take advantage of special offers or limited-time discounts when you’re shopping. 

Gift cards aren’t overly thoughtful, either.

They’re often seen as last-minute gifts that were bought because your relative couldn’t think of anything else to buy you!

Spending time looking for the perfect gift shows a lot more thought than simply ordering a gift card from a random store. 

Plus, if you buy a more traditional gift, you can take advantage of sales and discounts, which is great for your gift budget.

5. Don’t Forget About Birthdays And Other Special Occasions

Christmas is likely to be the most expensive time of the year for most families in the US.

However, if you really want to maximize your gift-giving budget don’t forget to incorporate other celebrations, holidays, and birthdays throughout the year.

When you’re putting your budget together, sit in front of the calendar and make a list of all of the birthdays, anniversaries, and other special events that will occur in the coming year.

If you notice that you have a disproportionate number of events in the fall, you could tailor your savings contributions to make sure you have enough in your account going into this period. 

Remember, you set the rules!

You can mix things up and adjust your savings contributions as you go, providing you will meet the annual target you have already noted. 

6. Stick To Your Budget

A budget is only useful if you stick to it. Otherwise, what’s the point in putting it together in the first place?

In other words, if you’ve decided to limit birthday gifts to $50 per family member because that’s what you can afford, then make sure that’s exactly what you spend. 

Try not to be influenced by holiday marketing campaigns that encourage you to fork out a ridiculous amount of money for a gift that will be reduced to a fraction of the price in the new year. 

Some people take their budgeting for gifts to a new level and actually buy gifts throughout the year. This is an excellent way to take advantage of seasonal discounts and offers without having to pay the big bucks during high-demand seasons. 

Providing you have the space to store the items, there’s nothing wrong with picking up the odd Christmas present in January if you find something at an excellent price! 

Seriously, this kind of preparation makes budgeting for gifts significantly easier throughout the year.

7. Go In On A Group Gift

Group gifts are an ideal way of buying better gifts with less money. For instance, if you’re buying a gift for a co-worker’s retirement, twenty people kicking in $10 can buy an excellent gift.

But group gifts aren’t just reserved for co-workers, they also work well when you’re buying for family members and friends.

While some people turn their noses up at the thought of giving joint gifts, it’s a great way of buying awesome presents without breaking your budget. 

Just be mindful that communal gift-giving requires a little bit of planning and foresight.

If you know someone’s birthday is coming up in a month or so, begin a group chat with your siblings or close friends and suggest the idea of contributing to a communal pot for a decent gift. 

You could share the responsibility of getting the gift, too, so you don’t always have to be the one to actually do the shopping and think about what to buy.

You’ll find that people will often be grateful for one awesome gift rather than a handful of smaller, less inspired choices. 

8. Shop At Second-Hand Stores

Can you really buy someone a gift from a second-hand store?

Sure you can!

While you might want to steer clear of clothes, you can find a whole host of interesting gift ideas in thrift shops and second-hand stores. 

Their shelves are usually filled with trinkets and interesting objects, as well as a wide range of other interesting gadgets.

While you might not find something in a second-hand store for everyone you need to buy a gift for, you will definitely find inspiration for certain people. 

For instance, if your workplace arranges a yearly Secret Santa, shopping at a second-hand store can be great fun and can yield some awesome gift ideas. 

Don’t forget that you can also shop in second-hand ‘stores’ online by logging into eBay or checking the classifieds and listings on Facebook Marketplace and Craigslist. 

Budgeting For Gifts: 10 Tips To Make It Easy And Stress-Free | Be The Budget

9. Make Your Gifts By Hand

If you’re a creative genius, consider making some of your gifts by hand.

Regardless of what you might think, people absolutely love handmade gifts, and they’re often treasured much more than store-bought items. 

Even if you’re not overly creative, you can put together a unique and interesting gift for a loved one. You might, for example, create a festive hamper filled with the recipient’s favorite food and drinks.

Or, maybe you could create a personalized photo album reflecting on the memorable times you and your friend spent together throughout the past year. 

If you don’t like the idea of making your gifts by hand, consider at least making your cards by hand.

This can be a super fun activity (especially if you have young kids) and can actually save you a heap of money. All you have to do is buy some blank cards and envelopes and get creative. 

10. Use Cashback And Couponing Apps

When you’re buying gifts for friends and family members, consider using cashback apps like Rakuten when making your purchases.

You can add Rakuten as a browser extension, meaning you don’t even have to think about it when it comes to completing a purchase via an online store.

If you’re not familiar with cash back apps, they work by being paid a commission by stores for sending customers their way. Rakuten then shares some of the commission with you in the form of cashback. 

They commonly offer free money and bonuses when you sign up, so it’s worth it even if you only plan on using the service a couple of times. We also recommend coupon apps like Honey when looking for your gifts online.

When you sign up as a Honey user, you will receive automatic coupons, promo codes, and various other deals that aren’t available to everyday shoppers.

While not every offer will appeal to you, you will almost certainly find something that you can make use of when it comes to buying a gift. 

Final Thoughts

Gift-giving isn’t easy. And if you aren’t careful, it can get pretty expensive.

And while it might not be the first thing that springs to mind when you think about financial planning, budgeting for gifts will definitely save you money in the long run and will help you stay on top of your expenses throughout the year. 

If you leave it until the last minute, you might end up spending a fortune on a gift that you can’t really afford.

Fortunately, if you follow the 10 simple tips that we’ve introduced in this post, you will stay on top of gift-giving and be well-prepared whenever you need to buy a gift.

Not only will this save you money, but it will give you the chance to think carefully about the gifts you buy and hopefully select something that the recipient likes. 

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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