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The cost of giving: how much are you spending on gifts?

Gift giving can be fun and rewarding, but it can also be expensive. Here are some tips on how to gift on a budget.

December 16, 2022

Written by Maria Hyde

Key takeaways

  • Avoid maxing out your budget by group gifting or a group fund to purchase gifts.

  • Homemade or DIY gifts can be more cost-effective and bring joy to others.

  • Plan for extra room in your gifting budget, as some gifts can exceed expectations.

The cost of giving: how much are you spending on gifts?

Your child has a friend's birthday party coming up — the question on your mind, along with “What gift should I buy?," might be “How much do I spend?"

After my kids attended five birthday parties in the span of two weekends recently, the topic of how much I should be budgeting for gifts has been top of mind. And, if you've got a social calendar taken over with birthday parties, holiday parties, weddings, celebrations (and more birthday parties), then it may be something you're thinking a lot about, too. 

The present trap: thinking that a higher price tag equals a more meaningful gift

Everyone has a different opinion on how much to spend on gifts. One poll suggests that Canadians spend an average of $95 on birthday gifts and $145 on wedding gifts. For a young child's birthday, some say shelling out $20 to $25 is good etiquette. 

It can be confusing and expensive if you only focus on how much you think you “should" be spending. When it comes to buying gifts, the ideal solution is to find the balance between something meaningful and what you can afford.

Here are some other options to consider: 

Giving a group gift

As with everything else, the prices for kids' toys have gone up. To avoid maxing my budget, I've been going in with other friends and parents on kids' birthday gifts that are higher priced. That way, we can buy a present we know the child would be excited about while splitting the costs. 

One birthday party trend that's been helping parents save some money on buying gifts is 'fiver' parties. Instead of bringing a present, guests are asked to contribute $5 towards a gift that the birthday celebrant is saving up for. Fans of this trend agree that it makes gift-giving easier and less costly.

Kim Tobros, a teacher, attended a similar party where guests were invited to contribute towards a bigger gift. “On the invitation, it said that the birthday girl would be bringing her piggy bank to the venue, and if we wanted to, we could make a small contribution to her bike fund as a gift," she said. “It was a simple way to involve my daughter in the gift-giving process because she got to drop the money in the piggy bank, and we likely spent less than on any toy we would've found perusing the stores." 

Thoughtful gifts that aren't more “stuff"

In my group of friends, we no longer do big presents for one another and choose to keep it simple. 

We'll send coffee and breakfast to someone's doorstep for their birthday. Celebrate a friend's promotion with a bottle of wine. Choose other smaller items like cupcakes or flowers to gift on special occasions.

When a friend welcomes a new baby, we'll take turns dropping off homecooked meals and offer to help in other ways with household chores or looking after their older children. Speaking from experience, showering new parents with prepared meals and your time are some of the most thoughtful and helpful gifts you can give that don't cost much. 

If you can, plan for extra room in your gifts budget

Even if you're already budgeting for presents, you may need to account for some instances where you do go over your expected costs. Laura Hayos, an occupational therapist who's been saving for a friend's destination wedding, had to reassess her budget to take into account all the events, like the bridal shower and bachelorette, leading up to the main celebration. 

“My regular monthly budget includes funds set aside for gifts of any kind. However, wedding gifts generally exceed my allocated budget, as there's an expectation in our current wedding culture to bring presents for each event with expectations on acceptable dollar amounts as well," she says. “As a result, I reallocate other disposable income to supplement my 'monthly gifts budget' to cover the costs of these presents."

One last tip to wrap it up 

Instead of buying cards, you can save a little extra cash by taking the DIY route. It may seem like small savings on its own, but when you have a birthday party almost every weekend, that money adds up. It's a great craft to do with your kids, and they'll love getting involved to make special cards for their friends.

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