I don’t know how you grew up, but when I was young, we did not get a lot of Christmas presents. Perhaps this was because my parents did not have oodles of money; perhaps it was because they had four children; or perhaps they just did not succumb to the pressures to spend a lot of money on presents during the Christmas season.

Whatever the case, most of our gifts were clothes (which I needed), something educational (boring) and perhaps something I had seen in a shopping catalogue (yes, I am that old).

Interestingly, as a child I was acutely aware that my parents (or Father Christmas, when I still believed) did not give us much compared with my friends. When I was a “believer”, I often wondered what I did that was “bad” enough not to get what I has asked for, or why I was getting things that my parents should simply provide for me (for example, clothes).

Regardless, I always felt short-changed. That feeling was exacerbated by the fact that I was born in early January and would often be given a “combo” gift – a supposedly larger gift for Christmas and my birthday, rolled into one. Trust me, anyone born close to Christmas will know full-well what I mean about the “combo” and will agree that the gift was not bigger!

With that being said, fast forward to 2024: what is the norm when it comes to spending money on Christmas presents? Well, if you follow the commercials on TV in the United States, I should look to buy a car for my spouse or spend only $500 on a diamond bracelet for my mother to make sure she knows that I love her.

I’m sorry, are these commercials serious? Perhaps I have become my parents, but who in their right mind would buy a car for someone for Christmas?

So, the question must be asked what should the norm be for Christmas gifts?

A recent article published in Forbes magazine suggests that the average American spends around $900 to $1,500 on holiday gifts (Jaggi, 2024). This includes presents for family, friends, colleagues and even self-gifting.

It was also reported that families with children often spend more, with average expenditures on children’s gifts climbing to approximately $300 to $400 per child. In contrast, adults typically spend less on gifts for each other, averaging around $100 to $200 per person.

However, other countries differed in their holiday spending habits. For instance, in the United Kingdom, the average British person planned to spend around £500 ($628) in total on Christmas gifts (Jaggi, 2024).

From my perspective, the norm comes down to the background of your culture. As we know Christmas is a Christian holiday, and part of the holiday tradition is spending time with family and gift giving, however cultural differences play a significant role in how individuals and families approach spending money on holiday gifts.

Therefore, the question is still relevant: what is the norm in different cultures or even regions around the world?

Let’s start with the western culture (eg, US, Canada, Europe), where gift-giving is a central tradition of Christmas, often emphasised as a way to express love and appreciation. Many people spend a considerable amount on gifts, with estimates varying widely based on income and local customs.

Holiday shopping can be a significant economic activity, often accompanied by sales and promotions (eg, Black Friday). Furthermore, Christmas is often heavily commercialised, leading to extravagant spending and sometimes financial strain on individuals who are trying to meet societal expectations. It's also common in western cultures to create lists of desired gifts, making shopping more targeted.

In contrast, in eastern cultures (eg, Japan, China) the focus is on shared experiences, rather than material gifts. And what is far more important than material gifts is the family gathering together and having a meal. In contrast to western culture, when gifts are exchanged, there may be more emphasis on presentation and the act of giving than on the monetary value. Traditional customs, such as giving money in envelopes, can also play a role.

Now turning to Latin American cultures, there is a strong focus on community, along with a strong focus on family and family unity. In many Latin American countries, the Christmas season is a time for family gatherings, large meals and communal celebrations. Gift-giving is significant, but mainly within close-knit family units. However, families will come together to contribute to communal activities and festivities.

Nordic countries are considered to be frugal spenders during the holiday season. Their cultural preferences are marked by practicality and minimalism. Gifts are often homemade or picked up a local Christmas market.

Finally, although Christmas is not a significant holiday in Middle Eastern cultures, there are other significant holidays where gift giving does occur. But again, gifting is often modest, rather than extravagant.

I am not sure there is a right or wrong answer regarding how much to spend on Christmas gifts, but I do think that with the commercialisation of the holiday itself, things are beginning to get out of control. Therefore, it is important to remember that when it comes to spending on Christmas gifts, budgeting is key.

Start by setting a total gift budget, then create a list of recipients and allocate specific amounts for each. Consider meaningful gifts over expensive ones; homemade items or personalised presents often carry more sentimental value.

Look for sales and discounts to stretch your budget further, and don’t hesitate to shop early to avoid last-minute price hikes. Consider group gifts for extended families or friends so that you can share costs while still celebrating together.

Finally, remember that the thought behind the gift matters most: thoughtful gestures can often be more cherished than pricey items.

References

Jaggi, N. (2024, October 29). Consumers Plan To Spend Big This Holiday Season. Forbes magazine. Available from: https://www.forbes.com/sites/naveenjaggi/2024/10/29/consumers-plan-to-spend-big-this-holiday-season/. [Accessed 7 December 2024].

• Carla Seely has 24 years of experience in the international financial services, wealth management and insurance industries. Over the course of her career, she has obtained several investment licences through the Canadian Securities Institute. She holds ACSI certification through the Chartered Institute for Securities and Investments, UK; QAFP through FP Canada; and AINS through the Institutes. She also has a master’s degree in business and management