How much to spend on Christmas gifts

Base your budget on how much you have to work with, not on what other people are giving you. Photo / Getty

The No. 1 rule for holiday shopping should be to stay out of debt.

So before you hit the stores, make your list and check it twice. And don't feel bad about crossing some people off your list if your budget is tight, consumer experts say.

"My big thing is you should not be going into debt to spread some holiday cheer," says Jodi RR Smith, owner of Mannersmith Etiquette Consulting, which coaches businesses and individuals on communication.

Once you've narrowed your list, base your budget on how much money you have to work with, not on what other people are giving you, says Leah Ingram, a blogger who writes about consumer spending. A surgeon earning six figures will have a different budget than an elementary school teacher, she added.

Guidelines on how much to spend may not be much help when it comes to your family. You know better than anyone what your child needs or what you can afford.

And for a spouse or a significant other, the amount you spend doesn't matter as much as the arrangement you have agreed on, says Lizzie Post, co-president of the Emily Post Institute and co-host of the Awesome Etiquette podcast.

"Stick to whatever you decide," says Post, adding that if you agreed not to exchange gifts, you shouldn't go out and buy something. "Don't go above and beyond and then make the other person feel lousy."

There are no hard and fast rules for exactly how much you should spend on each present, but here are some general guidelines from etiquette experts:

Siblings and cousins: $20 and up - The first step is to decide if you even want to exchange gifts. "Have the conversation," Smith says. "Don't presume that because you've always given each other gifts that that's how it's going to be going forward."

Adult siblings who still want to give presents may want to do a gift swap, where each person only has to buy one item, Smith says. The same goes with your cousins. Families who decide to do a group gift exchange can set a spending limit, say in the $20 or $50 range, says Smith. But if the people in the gift exchange have widely different incomes, then it may be best to let everyone buy a gift they can afford, Post says.

Nieces and nephews: $25 and up - Save the big bucks for when your nieces and nephews are older and are more likely to appreciate the effort you put into the gift, Smith says. However, you shouldn't rule out more expensive presents for younger kids if the gift may help out the parents. For instance, you can ask the parents about making a contribution to the child's college fund. Or you can set up a savings account that the child can use someday.

Another strategy is to coordinate with the parents, as well as other aunts and uncles, on which gifts to buy. The parents can fill you in on their children's wish list, while relatives can split the costs for a big gift or buy several presents that go together. (Say, a few people split the cost of a bike and another person buys the helmet.) Some parents might even say that they don't want their children to receive any gifts from their aunts and uncles, Post says, requesting holiday cards instead.

Parents and in-laws: $20 and up - If there are grandchildren in the picture, the sentimental value of the gift may be more important than the dollar amount you spend, Ingram says. For example, she has given her in-laws framed copies of the kids' school photos, or aprons marked with the children's hand prints. These gifts can be low-cost but have a long shelf life.

You can also treat your parents or your in-laws to something they might otherwise purchase for themselves. Ingram says she often buys her mother an annual subscription for a magazine she likes to read. For her in-laws, she may buy them a gift card to their favorite restaurant. Another idea is to spend money on an activity, such as tickets to a Broadway show for the entire family, she said.

Close friends: $15 and up - One rule of thumb for a close friend is to spend as much as you would on a typical night out, Smith says. For example, if your usual Friday night activity is a trip to the movie theater where you only spend $15 on a ticket and snacks, then that's about how much you should spend on a gift. But if your usual night out is more upscale, where you spend hundreds of dollars to go to the theater or eat at a nice steakhouse, then your budget for gifts should be more in that range.

If you're looking to lower costs after years of giving each other gifts, consider a group gift swap instead, Post says. But don't automatically assume that your friends want to exchange gifts, Post says.

Teacher: $10 to $25 - Figuring out how much to spend per teacher will depend on how many children, and how many teachers, you're shopping for. If your child has only one teacher, it's a much simpler scenario than for middle school or high school students who have six or seven teachers each. Smith recommends spending roughly $15 to $20 per teacher, if you can. Ingram recommends spending about $25. But some parents who live in wealthy neighborhoods or who send their children to a pricey private school may want to spend more. Others with tighter budgets may want to spend less.

In some cases, it can make sense to talk to other parents about pooling money together for one gift or gift card. You can give a suggested amount, say $10, but let the others know that all amounts are welcome, Smith says. Sometimes, it may mean more to the teacher to receive a sincere thank you letter from the family, Post says. And a good backup plan is to bake cookies or other treats that teachers can share with each other and with their students, Ingram says.

Co-workers: $10 to $15 - Before you buy anything, you need to understand the culture and the rules of your office. In some workplaces, colleagues always exchange gifts while in others, they never do. You should also be cautious about buying something for your boss, since it may look bad if you buy a present for your boss and no one else does, Smith says. Generally speaking, it's safer for someone in a management position to buy small gifts for the team he or she oversees, she says.

Don't feel pressured to participate if there is a group gift swap among colleagues, Post says. But if you do take part, keep the gifts business appropriate - say, a nice pen or a picture frame for the desk, Smith says. And if you're not sure of the culture but want to do something nice, consider bringing in a snack or dessert that everyone can share.