What’s the magic number to spend on Christmas gifts? Is £50 per gift the sweet spot, or does that make you the Grinch? Should you go for one eye-wateringly expensive present or a stocking full of small things? And let’s not get started on what comes from Santa or your overworked bank account!
Thankfully, Christmas isn’t one-size-fits-all, and what works for one family doesn’t for another. Yet, striking a balance between treating your child and sticking to your budget can feel like a juggling act. So, let’s grab those shopping sleigh bells and look at how to do Christmas without breaking the bank.
'Tis the season to spend spend spend
According to stats from Voucher Codes, the most significant portion of Christmas spending will go on toys this year, with £2.13bn to be spent over the six-week festive period.
Data also shows that spending on kids' gifts has increased by £2.68bn (+73%) in a generation. The average Brit will spend £119.45 per child on presents this Christmas, with one in four (23%) spending more than £200!
But here’s the kicker: more than half of parents (54%) say they feel pressured to snag the latest toys because nearly half (46%) worry their kids might end up disappointed. So the question is, why do so many of us overspend? For many, the thrill of gift-giving can be contagious, and it’s easy to get swept up in the excitement of Christmas. Social media doesn’t help either, with endless pictures of curated holiday hauls and kids happily smiling and surrounded by numerous presents.
Rebecca Lockwood, mum to Eva, 11 and Renae, 6, agrees,
"There is certainly a pressure at Christmas to make sure my children have everything they ask for, but I try to set expectations when we write the letter to Santa with a Christmas list. I talk to them about how mummy and daddy help Santa with the list. Santa gets one thing, and we get the rest. But with YouTube adverts between the things they watch, they often get excited and ask for so many things. So we talk a lot about having a budget and how we have to stick to it. When we go shopping, we talk about the value of things, which makes them aware of how much things cost. It also really helps when giving gifts as they seem to appreciate things more and their value."
Karly Hodson, mum to Amber, 13, agrees, “I do tend to go overboard at Christmas, but I never really regret what I spend. As a child, I never really got what I wanted and asked for, so if there’s something Amber wants or needs, then we tend to get it (within reason). As she’s getting older, she is realising that the things she wants are more expensive, so she does understand that she won’t get as many presents as she used to get when she was little.”
How to keep your gift spending in check
A poll by Ipsos found that three-quarters (73%) of parents think that the expectations on children's Christmas presents have got out of control, and a similar proportion (74%) say that children should be happy with whatever they get. It’s time to talk to kids about gifts, spending, and Christmas.
It doesn’t take away the magic of Christmas when you don’t buy everything on a child's wishlist. A few well-chosen gifts often hold more meaning than an overflowing pile of toys, as kids can quickly become overwhelmed when faced with too many options, diminishing their ability to appreciate what they have.
Instead of trying to satisfy every desire, ask your children to choose gifts that resonate with their interests or passions. This will help you stick to your budget and encourage your children to value quality over quantity.
And don’t let this whirlwind of spending overshadow what matters, says parenting expert and author Sue Atkins, “Many parents worry about disappointing their children, but it’s important to remember that children value time, attention, and love just as much as presents. Instead of feeling obligated to overspend, focus on creating magical moments and traditions that last a lifetime. Set a family budget, make giving more personal and teach your children about the true spirit of the season.”
Discuss Christmas expectations
Research by the Money and Pensions Service shows that from 3 to 7 years, children begin to grasp basic money concepts. This means they can differentiate the value of items and often associate larger objects with higher costs. They have also grasped how to recognise the value of money and understand that it can be exchanged for goods.
All of this means even young children can start to understand the limitations of Christmas spending. Louise Hill, CEO and co-founder of GoHenry, says, “If something seems out of reach, rather than struggle to get it for your child, work together and involve your child in setting a Christmas gift budget. Explain the importance of financial limits and how this affects gift choices. This, in turn, will help them learn how to prioritise their own wants.”
Another tactic is to encourage gratitude by discussing the gifts they already have and the experiences that come with the Christmas season. This can help shift their focus from wanting more to appreciating what they receive.
If your child is adamant they want a very expensive item, suggest you give them money towards it at Christmas, and they save up for the rest. This can involve finding new ways to earn or contributing their allowance towards it. Adding their money will also help them consider whether the item is actually worth it.
Encourage kids to buy gifts for others
Encouraging children to save up for family presents also teaches valuable lessons about wish lists, money management, budgeting and the actual cost of gifts.
Parenting expert and author Sue Atkins agrees, “Teaching children about spending and saving during Christmas is a valuable lesson that can help them understand the true value of money. Encouraging them to save and buy gifts for immediate family members fosters responsibility and generosity. It teaches them that thoughtful giving doesn't have to be expensive and helps them appreciate the effort behind each gift.
“Involving children in budgeting and decision-making also strengthens their financial literacy, an essential skill for life. By managing their own money, they learn the importance of planning, prioritising, and giving meaningfully rather than simply focusing on receiving.”
When kids save up for a gift, they begin to grasp the effort that goes into earning money and the importance of budgeting and saving. This enriches their understanding of financial responsibility and fosters a spirit of giving. It’s also a great way to help them manage their expectations around what they want as they learn that gifts don’t just magically appear (apart from Santa’s, perhaps!).
