How much to spend on gifts? It’s a question that dictates our decisions multiples time throughout the year.
You know better than to get a cheap gift on a birthday, anniversary, Valentine’s day, or similar special occasion for a spouse or significant other.
However, when it comes to coworkers, relatives, friends, and acquaintances, the answer is not so easy.
It’s easy to get into a Curb Your Enthusiasm type of situation of awkwardness, uncomfortableness, and regret.
According to a survey by the National Retail Association, Americans spent an average of $640 on gifts. That’s a lot of money in these stressful economic times, that’s a lot of money.
I think that is an estimate based on surveyed people with multiple children, friends, and wedding invites. Maybe this means that I don’t have enough friends?
Anyway, I once learned the hard way that gift-giving can be a metric of friendship, even if by self-imposed perception.
Friendship Means Never Regretting Gift Purchases
I have a few continents I must still visit, but I have traveled extensively within the past two decades.
During my travels in college I made a Japanese friend, Ria, and we stayed in contact for many years.
One year, she came to New York City, my native hometown.
I figured I should get a gift for her, so I got a relatively cheap sweater cap with the NY Yankees logo on it.
How Much to Spend on Gifts – or Not
If it isn’t obvious, no, I was not making a lot of money at the time.
Anyway, Ria and I met, and we exchanged gifts. She got me a Seiko watch! It had to worth $60 to $120! At the very least anyway.
No, she didn’t spend a fortune, but I barely spent, $15 on her. Wow, did she like me? (That question haunted me for years!)
Or, did this exchange just reveal how each friend valued the other’s friendship? Maybe she’s just really polite?
Anyway, money can’t buy you love, but it sure does help to approximate the relationship value we perceive in others.
So, how much should you spend on gifts?
There is no universal metric. It depends.
Gift-Giving is All About Perspective
It’s one thing to make decisions about gift purchases on your own. When you are married, have kids, and extended families, who decides how much money is spent on whom?
For some married couples, budgeting $200 monthly on gifts might be too much. Other couples create a family flowchart hierarchy to decide how much to spend on gifts.
For example, grandparents may warrant $150 while siblings and children might warrant less.
Some people believe that, considering the state of the economy and personal finance, its OK to set a hard limit of $50 for gift-giving in general for anyone.
You should give according to your own personal preferences and not that of others. For example, $100 might be enough for a wedding gift.
You might want to spend $180 on close family and relatives and about $70 for friendly coworkers. About $25 to $50 is appropriate for children, though that amount hits a gray area as children grow up.
We all want to show the people we care about in our lives that we care about them.
But when it comes to gift giving, you should consider your own budget and not risk financial peril for the sake of good appearances.
It’s the thought that counts and your family and friends will appreciate that.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.