The holiday season is an exciting time of year, but it’s no secret that it can also cause financial strain. One of the biggest challenges is managing gift-giving expenses and expectations—both things that are easy to overshoot. If you need a little help staying on track this year, there’s a simple process you can try: Enter the four-gift rule.

The four-gift rule is a money-smart approach that can work for all ages and relationships. It’s an organized strategy that not only curbs excessive spending, but also keeps the holiday spirit alive through a mindful approach to gift-giving.

What Is the Four-Gift Rule?

The four-gift rule is a simple yet effective way to manage your holiday budget by limiting gifts to four items per person:

• Something they want
• Something they need
• Something to wear
• Something to read

According to the National Retail Federation, consumers are forecast to spend a record $902 per person in the 2024 holiday season—and 71% of that will be on gifts. If you’re trying to combat the urge to overspend and overconsume, both of which can be tempting during the holidays, this “rule” can really help. It also encourages you to be more mindful, creative, and personal in your gift choices, which are always appreciated. And, as a bonus, it rhymes, making it easy even for kids to remember.

1. Something They Want

When choosing an item for the “something they want” category, focus on a gift that brings genuine joy or fulfills a wish. You’ll want to start by setting a budget for this specific category (and the others) to prevent spending too much on one thing. When you’re ready to start shopping, keep an eye out for sales and check coupon websites for online deals.

Some gift ideas for this category include:

• Board games, video games, or toys
• Concert tickets
• Craft kits or hobby kits
• A new gadget
• A gift card to their favorite store or restaurant

2. Something They Need

This category encourages you to buy something that is both practical and sought-after. But don’t just do the minimum here; instead of defaulting to mundane necessities that anyone could buy themselves, consider things that will improve the recipient’s daily life in meaningful ways.

Some gift ideas include:

• A reusable water bottle or coffee cup
• Art supplies
• A new set of tools
• An ergonomic pillow
• A set of reusable grocery bags

3. Something to Wear

“Something to wear” may sound fairly straightforward, but these types of gifts can encompass more than traditional clothing. Be flexible in your interpretation here. For example, you technically wear jewelry, handbags, and headphones. Consider the ways that accessories like this can enhance someone’s personal style.

Gift options in this category might include:

• Headphones
• Jewelry
• A sports jersey from their favorite team
• New sneakers
• Cozy pajamas

4. Something to Read

Picking out a gift to read can be a ton of fun as you dive into the recipient’s interests. While you can always pick out a bestselling novel or children’s book to satisfy the requirement, it’s worth noting that there are tons of genres and formats you can explore.

For example, some unique gifts to consider include:

• Graphic novels or comic books
• Cookbooks
• A subscription to their favorite magazine
• An eReader
• A subscription to Kindle Unlimited

Benefits of the Four-Gift Rule

The four-gift rule is a great way to rein in holiday spending if you’re looking to be a little more budget-conscious. Whether you’re shopping for coworkers, extended family, or your kids, there are multiple ways to benefit from this relatively basic idea:

• Cut Costs for Christmas and Beyond: Following the four-gift rule makes it easy to manage your gift budget with a little more care—not only for Christmas, but for all gift-giving holidays and occasions. This time of year, in particular, makes overspending all too easy, which is a slippery slope to accumulating debt. The last thing you need is financial stress during the holidays.
• Encourage More Thoughtful Giving: Shopping for gifts is a prime opportunity for mindless impulse buying. Limiting gifts to these four categories encourages you to be a bit more intentional in what you choose.
• Minimize Clutter: Being on the receiving end of lots of gifts isn’t always a good thing. This can lead to clutter, especially if most of the items aren’t things you necessarily want or need. Fewer presents make it easier to organize and keep the things you truly cherish.
• Promote Sustainability: Shopping with intention—and putting quality over quantity—reduces overconsumption and keeps unwanted items out of landfills. This is an overall more environmentally friendly practice.
• People Appreciate Thoughtfulness: A Gift.com survey found that people value gifts with meaning and, unsurprisingly, dislike gifts with obvious little thought behind them. Your recipient is more likely to appreciate the effort when you’re more selective and intentional in what you buy.

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