The 3 Gift Christmas Rule – How and Why to do it

Published on November 12, 2019 by Lauren

Have you heard about the 3 gift Christmas rule?  Your kids only get three gifts chosen from three different categories.  Here are the 3 categories that we use in our home.

3 gift Christmas rule


One of the toughest struggles as a parent is to give my children a joy-filled Christmas. To me, that somehow translates to giving them the gifts that they want in hopes that presents will make them happy.

With the rocketing prices of products every year and the massive marketing initiatives that are bombarding our children at every turn, the struggle to not bankrupt the family finances on Christmas presents is real.

As with most financial matters in life, learning how to budget is key.

Once you set a Christmas budget and stick to it, you’ll be able to sleep soundly that two goals have been met. You’ll have made selective, smart decisions for happy children and a happy checkbook. Here are some strategies, tips, and tricks to consider for establishing a Christmas budget for your child.

1.) Equality Approach: When It’s Important that Everything is Equal

For many families, it makes sense to give each child an equal value in their gifts. This develops a sense of equality to the presents. The number of children and your financial situation will dictate what your dollar amount is, but with some planning and strategic shopping, you can certainly make even a few dollars per child stretch quite a bit.

Here are the basics: Determine how much money you want to spend on all the kids combined. Divide it equally by the number of kids you’re buying for.  For example, if you have $100 to budget and you have 3 kids then they each receive $33 worth of gifts. It’s that easy, but you have to stick to it!

Tip to make this work: Don’t go over budget for anyone. If you go over a little on each one your budget will be exponentially demolished!

2.) Have the Kids Do the Shopping: Teaching Thoughtfulness to Older Kids

This is my favorite spin on the equality approach. You still set a budget and you assign an equal amount to go to each child. The difference is that you have the children do the shopping for each other. So you set a budget per child. Then you give each child that amount to spend on their siblings.

Here’s how it works: Let’s say your budget is $50 per child and you have three children. You give each child a $50 spending limit and they have to purchase gifts for each of their siblings within their budget.

My favorite part is when the kids find the perfect gift for one of their siblings and pool their money to purchase it. They’re always more generous and thoughtful than I expect.  This strategy has the added bonus of teaching about budgeting, giving, and combining efforts for a greater impact!

Deal breaker tip: The children will not end up with the same value of gifts. But they will have learned to give and think of others, and your budget is still intact. But if absolute equality of gifts is important to you, this strategy will definitely disappoint you.

3.) Sliding Scale Spending: Age Matters

Gift ideas for older children are definitely going up in price and are shifting up to accommodate a more tech-savvy generation.

With that in mind, understand that you might be spending more for one tech gift for an older child than you will on a bag full of fun toys for a younger sibling. Setting a dollar amount based on this will still allow you to budget and limit your overall spending.

The key is in the details (I LOVE MATH):

  • Decide your overall budget in dollars. This will be BUDGET #.
  • Write down the age of each child in years. Add their ages together. We’ll call this the YEAR #.
  • Divide the BUDGET # by the YEAR #. The result is the BUDGET per YEAR amount.
  • Multiply the each child’s individual age by the BUDGET per YEAR amount and that’s their allotted gift budget.

This works better with an example:

  • Someone budgets to spend $400 total on Christmas gifts for all their children. Their BUDGET # is 400.
  • Their kids are 15, 12, 8, and 5. Their YEAR # is 40.
  • 400 divided by 40 is 10. Their BUDGET per YEAR amount is 10.
    • The 15-year-old is allotted $150.
    • The 12-year-old is given $120 in gifts.
    • The 8-year-old gets $80 in presents.
    • The 5-year-old receives gifts worth $50.
    • $150 + $120 + $80 + $50 = $400 total spent – Right on budget!

4.) The 3/4 Gift Christmas Rule

I have a feeling that this idea was originally based on the bride’s tradition of wearing “something old, something new, something borrowed, and something blue.” Whatever the origin, this themed giving is perfect for families that want to give thoughtful gifts in a simplified way.

I once did only 3 gifts, but the past few years I've increased it to four gifts + a Christmas Eve gift.

3 gift Christmas rule

How to make this happen: Make a chart with each child’s name on the left column with row headings for each category.

  • Something They Want
  • Something They Need
  • Something They Wear
  • Something They Read

Now fill in your chart as you plan your purchases.  That’s it. Each child receives four gifts – one from each category.

While this strategy doesn’t specifically limit the amount of money that you spend, it almost always translates to savings in the long run. Truthfully, unless you’re spending way too much in each category for every child this method is pretty sensible.

And this method can kill two birds with one stone! It’s perfect for providing a much need winter coat or a nice Christmas dress that your child needs. Everybody wins with this one. You child receives a gift, they get a much needed clothing item, and you not only stayed within your Christmas budget, but you also helped out your clothing budget for the year.

Here's the simplest strategy of the bunch.  Just limiting the number of gifts given to three or four really makes me focus on choosing quality presents that convey my love without breaking my budget.

We make it work by limiting the gifts to three presents per child.  One kid might get all art supplies, another some Lego sets, and then the baby might get pajamas, a snow suit, and a ball.

However you arrange it, selecting the perfect three gifts for each kid is challenging and rewarding and budget-friendly all rolled into one.

5.)  BONUS Christmas Eve Gift Pack

You can complement any of these strategies with the Christmas Eve Gift option.  This is a gift that each child opens on December 24.  It allows another gift opportunity, gets the gift exchange and excitement rolling a day early, and it's fun to think outside the box on this one.

Each family member gets a box with:

  • pajamas
  • a movie
  • a book
  • family time snacks (like popcorn, hot chocolate packet, apple cider, special holiday sweets or cookies)

This gift provides the setting for a family-focused Christmas Eve.  Everyone gets in their jammies and snuggles up with a book and a movie.  And those don't all have to be new.  Maybe borrow the book and DVD from the library or buy them pre-owned from your local used book store.

The pajamas could match or be silly.  The snacks could be something you make together or just snuggle up and enjoy around the tree!

The point of this gift is to give a gift that brings everyone inward and to enjoy time together as a family. A gift to focus everyone on what really matters.

Find one of these strategies and make it work for you. Or blend them all together for a personalized solution. However you work it, you can come out of the Christmas season with a feeling of accomplishment and encouragement. Make Christmas simpler this year by following the 3 gift Christmas rule.


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