3 Tips for Your Holiday Gift Budget

Before you go, we thought you'd like these...
Before you go close icon
Tips to Stay Within Your Holiday Gift Budget
The holidays are almost here, and that means gift-giving season is right right around the corner. Unfortunately, that also means buying expensive presents for friends and loved ones. Luckily, there are ways to buy that perfect gift without unraveling your savings.

First, when it comes to buying gifts, figure out how much you can afford. Financial advisers suggest spending no more than 1.5% of your annual take-home income during the holiday season. For example, if your annual take-home income is $50,000, just multiply $50,000 by 0.015 and you'll see that your holiday budget should be $750.

Now that you have a budget, think about who to spend that money on. One effective way to determine who to focus your finances on is by using a three-tiered system. The first tier is for family. If it's within your budget, exchange bigger ticket gifts with each person in your immediate family. The second tier is for friends. Try doing a single-family gift for your friends, like movie tickets or a fun board game. And finally, the third tier is for neighbors and co-workers. For a nice touch that doesn't cost too much, bake them homemade goods or give them handmade cards.

Lastly, to make sure you don't overspend, start shopping before you feel festive. The best time to do your holiday shopping is from October 1 to December 1. The closer people get to the holidays, the more they spend on gifts.

Before you start your holiday shopping, remember these tips. By creating a smart budget, you can spread the holiday cheer without being a Scrooge.

Budget-Friendly Last-Minute Gifts for Kids
See Gallery
3 Tips for Your Holiday Gift Budget -- Savings Experiment

Sunbeam Doughnut Maker ($39.99 at Best Buy)

Watch how fast they put down the video games once this deliciously fun and surprisingly healthy (the treats are baked, not fried) doughnut maker is unwrapped. It's simple enough that younger kids can operate it with a little supervision, while the older elementary set can do it themselves. Breakfast in bed, anyone?

Snap Circuits ($39.42 at Amazon.com)

Winner of multiple toy awards, Snap Circuits is the top-rated toy on all of Amazon, with 362 five-star ratings. The reason this toy is so beloved by parents and kids alike is that it's the perfect combination of educational and cool. The kit contains dozens of parts and instructions for fitting them together to make everything from a radio to a lie detector.

Marshmallow Bow Shooter ($30 at Chasing-fireflies.com)

After two years of pleading, I finally bent my no-weapons rule to allow these. What's more fun than shooting marshmallows at your siblings? Answer: The peace and quiet of having the kids outside for hours. The only problem is getting the adults to put them down.

Yoda Robeez shoes ($28 at Robeez.com)

This one may be more for the parent than the child, but babies won't notice and parents of a certain age will be thrilled. Sadly, the Yoda design didn't exist when my kids were toddlers, but we owned more than a few pairs of Robeez and they wear (and wash!) like a dream.

Make Your Own Cards kit ($24.88 at Wal-Mart)

A gift that makes thank-you cards fun and painless? Bring it on. This kit contains blank cards, lots of punch-out shapes, and design suggestions for a whole range of greeting cards. Not only did my two kids spend hours with this, they have even asked for refills.

Cloud B Twilight Turtle ($21.76 at Amazon.com)

This sweet, soft turtle projects a sprinkling of stars on the ceiling in a variety of colors. So simple, but reassuring for little ones who are anxious at bedtime. Both of my children got a Twilight Turtle as babies and both turtles still shine nightly.

IlluStory make your own book kit ($19.95 at Barnes & Noble)

This kit is great for children who love to write and draw as much as my oldest does. Kids can write and illustrate their own story, then send it off to be transformed into an actual book.

No Stress Chess ($15.48 at Amazon.com)

When my daughter asked to learn chess a few years ago, I groaned, having never mastered the game myself. This set, with its instruction cards and helpfully labeled game board (hints on one side, plain on the other once you're ready), was the answer. It's simple enough that we both quickly mastered the basics -- though I never got good enough to beat her.

Crayola box of 96 Crayons: ($7.49 at Staples)

Sometimes the best gifts are the most obvious. A brand new box of crayons is a timeless thrill, and you can never have too many. Spring for the big box and throw in a thick pad of paper for a present than spans age, gender, and generations.

UNO Original ($5.99 at Toys R Us)

Another classic that may not get the big oohs and aahs, but will have lasting appeal, is this childhood favorite that can be enjoyed by younger kids as well as tweens (and adults!). Wrap up the cards with an invitation to a family UNO tournament, and let the games begin!

Ninjabread Men ($5.49 at PerpetualKid.com)

Ninjas are big this year, and these cute cookie-cutters appeal to ninja fans of any age. Package them up with some gingerbread mix and a tube of premade frosting, and you have a tasty gift for around a tenner.

Read Full Story