Friends, bosses and in-laws: How much should you spend on holiday gifts?

It’s fun to receive holiday gifts, but giving them can be hard — especially when you’re unsure of how much you should be spending.

“I suppose the holidays might be simpler if there was a rule of thumb or algorithm of how much to spend on your loved ones; you’d plug in a percentage of how much you love them and your salary and it would come up with a figure,” said Melissa Leong, author of personal finance guide, Happy Go Money.

“But that’s not how life works — or should work.”

Instead, it’s up to us to determine how much we will spend on family and friends. Here, experts share their tips on how to figure out how much you should dole out on presents for folks on your list.

Figure out your budget

First step to holiday shopping is coming up with a budget. You don’t want to be in debt come January when your credit card bill rolls around, Leong said.

“Figure out how much you have to spend over the holidays,” Leong said. “Or work backwards and make a list of what you need to buy (gifts, decor, hosting, clothing, etc.) then start cutting things off that list with the ruthlessness of a VIP club bouncer.”

Once you’ve figured out who is on your list, Desirae Odjick, a personal finance expert and founder of money blog Half Banked, said you need to figure out how much you can spend on each person.

“If that total feels good — meaning you can handle it and you’re not going to go into debt to spend that kind of money — great, you can pass GO,” Odjick said.

But if those numbers are causing you stress, you need to have what Odjick calls “the money talk.”

Be honest about money

Odjick said you need to talk to family and friends about how much each of you is comfortable spending. That way, no one is caught off-guard by lavish — or more down-to-earth — gifts.

“The closer you are with someone, the easier this can be,” she said.

If you and a friend are both fine spending $20 on a small present, stick within that budget. If both of you are trying to cut back this year, suggest exchanging homemade gifts like baked goods.

“Some of my favourite gifts have been jarred candied nuts or jams from friends,” Leong added.

When it comes to swapping gifts with a significant other, it’s important you’re on the same page about how much you want to spend. It can be awkward if one of you buys concert tickets and the other gifts a mug.

Odjick said that if an experience is more important to you, then plan to do something together. That way, you’re both able to partake and also form a new memory.

Homemade gifts go a long way

Just as your friend might really appreciate your famous jam, your neighbours will likely, too. People often feel obligated to get casual friends like neighbours or family friends holiday gifts, which can really add up. Even if it’s just a box of chocolate or bottle of wine, it’s easy to spend upwards of $100 on these types of presents.

To help save money, try making a big batch of cookies, for example, and package them in festive tins. Baked goods are also great to bring to the office for everyone.

“Last year for Christmas, a few of my friends had launched new businesses, and I printed their logos on mugs to show my pride,” Leong said.

Buy fewer things, but make those gifts meaningful

If you’re part of a big family, it can be easy to drop a small fortune on gifts for everyone. To keep things in control, Leong said it’s a great idea for families to do Secret Santa where you set a cap on spending.

If everyone is fine to spend $50 on one Secret Santa gift instead of $30 each on five presents, great. The important thing is you all agree on how much you’ll spend.

The same goes for in-laws. If they’re part of a Secret Santa gift exchange, then you don’t need to get them another gift. But if not, how much you’re expected to spend really depends on your family, said Jessica Moorhouse, a personal finance expert and host of the Mo’ Money podcast.

“I’ve never bought my in-laws gifts, and neither has my husband for my parents, but that’s just what works for our families,” she said. “If it’s a requirement to give gifts to the in-laws, I’d say $50-$100 is a good range to stay within.”

Don’t go overboard when it comes to professional relationships

It can be hard to know if you should give a gift to your boss — especially if you’re new to a company and want to make a good impression. According to Moorhouse, it’s safer to skip gifting to higher-ups.

“I think it’s honestly a pretty outdated and maybe even inappropriate thing to do depending on your company’s culture,” she said.

“I’m all for giving cards to superiors instead of gifts. Leave the gift giving to the boss! They earn a higher salary, and if they want to boost their department’s morale, they should give a little something to say thanks for all the hard work.”

Moorhouse said the same goes for your children’s teachers. While it can be a kind gesture to give them a present, she said it’s not really necessary. Instead, she suggests a thoughtful card thanking them for their hard work.

But, if you really want to give a physical gift, she said spend no more than $25 on presents for teachers.

Bottom line? The holidays aren’t about spending money, said Leong. Instead, try to focus on things you can’t put a price tag on.

“The holidays, for me, are about family,” she said.

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