Last year's family Christmas photo
Last year’s family Christmas photo

Although my husband and I aren’t frugal weirdos per say, we do try to keep things as frugal as possible in our household, especially around the holidays.

Part of our interest in frugality stems from the period of time when we lived in Grenada so my husband could attend medical school there. During that time we learned to be wise with our money, and we even paid off all of our credit card debt because we lived so simply on the island.

However, we still have a massive amount of student loans to pay off from my master’s degree and my husband’s medical school, so we’re constantly trying to find ways to simplify our lives.

While Mr. Frugalwoods and I enjoy/attempt to survive our very first month as parents to our daughter, Babywoods, I have a delightful slate of guest posts from my friends lined up for your reading pleasure. Today, please welcome the fabulous Catherine Alford from!

By: Catherine Alford

Our Children

When we found out I was pregnant with twins, that really kicked our frugality into overdrive. We started saving up as much money as we could in a “baby fund” so we’d be prepared to deal with all the costs of having twins.

Since then, we moved back to the United States, I became self-employed, we had our boy-girl twins, we all moved to New Jersey for hubs’ medical school education to continue, and we’ve learned a lot about life (and parenting) along the way.

One of the most important things we’ve learned so far is that instilling good financial habits, including frugality and minimalism, in your children is important to implement from day one. This absolutely includes making your Christmas traditions frugal and minimalistic too. Giving your children a frugal Christmas has many incredible benefits; here are a few of them:

Setting Expectations for Future Years

The twins meet Santa
The twins meet Santa

We decided to go frugal starting with the twins’ very first Christmas, even though they were only 9 months old and wouldn’t remember how big (or small) Christmas was their first year. It was really hard to keep a frugal and minimalist mindset at times. We’d see pictures on social media showing Christmas trees surrounded by presents, but we knew we were making the right decision by keeping Christmas small at our house and investing money they received from grandparents on their behalf.

What you give your children for their first Christmas really will set the tone for future years. If you start off by giving your child a pony, be ready to give them a fancy car when they’re old enough to drive. This is similar to lifestyle inflation. Once you get used to a more expensive lifestyle, it’s hard to cut back to being more frugal. It’s much easier to start off being frugal from a young age.

Teaching Children to be Giving, Not Greedy

When children get a little older, it’s important to teach them to be giving, not greedy. Giving lots of lavish, expensive gifts will eventually spoil children until they are greedy and even entitled. We want our children to grow up to be good, giving people, so we decided to keep Christmas simple at our home. Once they are a little older, we will likely start teaching them to give back by purchasing things for people in need or volunteering their time to serve people less fortunate.

Remembering the Reason for the Season

Finally, it’s important to teach children the real reason behind the Christmas season. Christmas is not just about giving and getting gifts, and it’s not just about visits from Santa Claus. Christmas is really about celebrating your faith and spending time with friends and family. Our lives are so hectic with constantly clashing schedules that time with our children is precious, and we plan on enjoying them while they’re young.

How to Have a Frugal Christmas for Children

Enjoying a frugal Christmas
Enjoying a frugal Christmas

It’s important to remember that giving bigger, better, and more gifts doesn’t show more love. We love our children very much but we want them to appreciate the gifts they are given instead of being focused on how many gifts they get or how much they cost. That’s why we decided to stick to the “Four Gift Rule” for our Christmas tradition. The “Four Gift Rule” entails giving gifts in the following categories:

  • Something They Want
  • Something They Need
  • Something To Wear
  • Something To Read

Other families might have different rules, such as setting a spending limit for gifts each year, or simply setting a limit on the number of gifts for each child without following the categories above.

No matter how you choose to go about it, giving children a frugal Christmas is a wonderful parenting decision that will help shape the people children grow up to become. We kept to the four gift rule last Christmas and we plan on doing the exact same thing this year. In fact, Santa already came and delivered a gift that’s sitting in our basement right now that he found on Craigslist. Apparently, that Santa guy likes being frugal too.

Catherine Alford is the go to personal finance expert for educated, aspirational moms who want to recapture their life passions, earn more, reach their goals, and take on a more active financial role in their families. She is also the founder of, an award winning personal finance blog that she created in 2010 and the innovator behind the web’s most comprehensive course on how to Get Paid to Write for Blogs.

Do you keep Christmas frugal in your family?

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  1. We keep all holidays frugal by focusing on experiences rather than stuff, which is why we stopped buying gifts. Instead, we have fabulous meals with and play tons of games with family and friends. We don’t have kiddos, but your four gift rule sounds like a great idea to keep gift-giving in check!

  2. That’s a great point that you want to set reasonable expectations for gifts in the future and keep Christmas about faith, family, and giving. We often buy our kids used gifts. We’re picking up a tricycle for our toddler off Craigslist today.

    College funds really are the gift that keep on giving, and that grow with the child. Our family has been great about contributing to these instead of contributing to the mess in my home by adding excess toys! Opening and seeding those funds was our first Christmas gift to our kid, since they were too young to even hold toys at that point.

  3. We’re trying to set the same example, and also focus on giving experiences and instilling traditions vs. toys. This past weekend we brought our kiddos to see the giant Christmas tree downtown and it was such a thrill for them to see an enormous Christmas tree all lit up. It really doesn’t take money to create a fond memory at all 🙂

  4. I’m taking care of the “something to read” part for my best friend’s new little guy – the best part is that the books all came from the library used book sale! So they were ridiculously inexpensive and the money also benefits our local library. Wins all around. =)

  5. I couldn’t agree more with this. I had wonderful Christmases as a child, which has left me with a love of Christmas lasting into my mid-fifties so far, and none of the things I remember are about the presents (except the presents I gave other people, which felt extra special because in my childhood and teens I had very little money, so saving for and choosing and wrapping gifts for those I loved became very special). what I DO remember – almost all of it about time spent with the family doing cheap and cheerful things together rather than about anything materialistic.

  6. First, I want to congratulate Mr. and Mrs. Frugalwoods on the birth of Babywoods!
    Second, I also have implemented the ‘something you want/need/wear/read’ gift-giving at Christmas with my two children. I read about it on another blog a few years ago and it really helped me as a parent set a goal for myself, to be honest. As a mom I get completely caught up in what the media says I should be giving my children at Christmas time. I needed an anchor, something tangible I could set my sights on in order to keep myself from going overboard at Christmas. Good for me, thus, good for my family. I agree with what you said, too, about steering our children away from excess and greed.
    One other thing we did this year was empty out the toy bin and carry toys in good condition that are no longer played with, to Boomerangs, (local thrift store). It gave my kids a visual of giving up something for the betterment of someone else, while making room for new things that are age-appropriate and that will get used regularly. We talked about how there are children who’s parents may not be able to afford to buy brand new gifts, and that’s why it’s awesome to give good, quality items,especially ones that we no longer use to benefit someone else. Granted, some of our brand new gifts are still quite modest, like play dough and $3.99 books from amazon, but still, I think they got the message. And they felt good giving to such a good cause like Boomerangs.
    Thanks for sharing!

  7. Yep, our not quite three year old gets Want/Need/Wear/Read as well…plus one gift from Santa. And this year, since he is old enough to converse about it, we are leaving some outgrown toys and books (in good condition of course!) for Santa to take to other boys and girls. Next year we will probably go one step further like Lisa above and let him choose some stuff to donate or sell.

    1. I love love love the idea that children should chose some of their toys for Santa to take to other children. What a wonderful circle for them to witness and participate in with you.

  8. I love your Four Gift Rule and I think you are doing a wonderful job instilling values to your children with a focus on giving when they are old enough to understand. We only bought gifts for our children at their birthdays and Christmas. We purchased good quality toys or items that they truly wanted, and although there was probably just one gift for them under the tree, they were quite confident that Santa got it right! You have a lovely family, by the way – the twins are adorable.

    I recently viewed a picture essay by Michael Wolf of Chinese factory workers and their very diffuclt working conditions. I feel very anguished and torn by this issue, because although these workers are clearly exploited, no other option exists for them and they need to work. I wish we could all agree to pay more for stuff, in order for companies in Asia to provide decent wages, decent working hours as well as protecting their employees from the fumes and toxic products used in the production of all that stuff (another major issue, as well). I can’t commend enough that we all focus on less stuff.

  9. For the holidays we do “want,need, wear, read, share and care” . For example they might want doll clothes, need pajamas and socks, wear a cool sweatshirt/dress, get a book or two, a game to share and we specifically pick something to help the world beyond what we usually do. This year they picked buying shoes that grow for kids that don’t have access to shoes.

  10. I’m pregnant with my first – and with the first niece or nephew and first grandchild – and oh holy geez the gifting has already begun. I’m fearful of what it will be like to set those boundaries with our extended family and trying to get them to contribute to a college fund or something in lieu of extravagant gifts.

  11. Keeping things in check at the holidays is as much about keeping the right spirit of the holidays as it is about frugality for us too. We currently just fill stockings (my husband and I do this for each other too instead of gifts) and then our toddler will get one gift from Santa (a toy) and one gift from us (a book – and some money in his savings account). The harder thing is handling the messages and inputs from other sources, whether that’s just things he sees around him in our culture or the traditions of friends/family that center more on gifts. It’s similar to talking about our frugal/minimalist lifestyle in general – I want to be keep from offending anyone and their traditions around the holidays but also to instill our values.

  12. We did the want, need, wear, read this year with my 9 year old step daughter. I think it is great. We let her put three items in each category. She only ended up asking for very small things. She seemed to like it because it helped her focus and identify things for her list more easily. Because she asked for such small things, I asked if she wanted anything big and she asked for the entirety of a book series. So she’s getting a lot of books for Christmas which makes me and her dad super happy! We are big believers in the power of reading.

  13. This year, we focused more on giving our Mini Monster investments over toys. I have always given her only a few gifts; one gift is the “big” gift, while others usually come from Five Below to satiate her unwrapping pleasure 🙂 I know of one couple who gave their baby a latex balloon on Christmas. He LOVED it!

    Mrs. Mad Money Monster

  14. We are doing the “Four Gift Rule” with the adults in my side of the family this Christmas, except we call it “Victorian Christmas”. We substituted to play with instead of something to wear as we are all already blessed with plenty of clothes.

  15. I have spent so much this year! but let me back up by saying that I live far away from my extended family and will be seeing them for the first time in 2 years. One teenage daughter in the extended family has not been doing well in her life and I will be paying for art lessons (a gift that keeps on giving). My daughter has had a good time picking out gifts for her cousins that she hasn’t seen for a while. We also had to get good winter boots for her as we will be going from the warm south to the cold snowy north. This will enable her to play with her cousins out in the snow lots. One other gift is a 30amp cord for my niece to heat the camper (that’s where we will be staying for 2 weeks so serves me as well). The cord will enable them to take the camper and plug it in at the campground and use it more. How can I afford all this? I recently moved into a rental situation that has halved my living expenses.

  16. We keep our holidays rather tame as well in the gift department. I was feeling so overwhelmed with what my in laws got our daughter for the holidays that I finally gave up and decided and told her that she would get something she wants, something she needs, an experience gift, and finally some money to go into her account for college roughly $100 and she gets the same from me for her birthday as well. Her father is another matter along with my mom. My dad doesnt send or give her any gifts and that is fine too.

  17. You’re absolutely doing the right thing. I’ve seen many families where the children receive an inordinate amount of gifts and the children rip up each gift and toss it aside in seconds and proceed to the next one. And when the gazillion gifts have all been opened they have this bored blank stare. The fewer the gifts, the more special they are to them.

    ” investing money they received from grandparents on their behalf” Another great decision! The only problem is that kids also suffer from the ”keeping up with the Joneses” complex. They WILL resent you for the ”stinginess” when they see their friends getting gazillion gifts and will only appreciate your wisdom when they’re much older, perhaps in their 30’s. And that also applies to college, kids who have to work for their education study more and party less. Good luck! Beautiful twins.

  18. My daughter, 12 gets only a very few presents and has not suffered for this. As a younger tot she was given many more, by everybody, but I put a stop to this asking people if they were so keen to give anything, give a small contribution to her future college fund. She only ever wants a couple of things, and has no problem with the few well loved things she does receive. She gets it, I wish I had gotten it sooner.

  19. I first heard about this “Want, Need, Wear, Read” from Frugal Trenches (blogger) and then a few friends on FB. I instantly loved it and decided to adopt it.

    My kids are 9 and 3, so we’ll see how it goes over. I’m only worried about the 9 year old. But he’ll get used to it.

  20. As well as keeping gifts down, I think a lot of people go into overdrive and think that their kids must have ALL of the Christmas stuff going on ALL THE TIME. My girl is 2, so we’ve set up a list of one fun holiday thing to do each day and we try to do it as a family. Since she loves all the lights, at least twice a week we go for a walk after dark to see some of the lights in our neighborhood. Today it was making Christmas cookies. Yesterday she got to watch a little bit of “Elf”. In a few days, when the rest of the family gets here, we’ll go to the local zoo’s reindeer festival and see Santa. I’m really enjoying doing things this way. She’s not getting over-stimulated, we’re not feeling overwhelmed.
    We’ve been decorating the same way, a little bit at a time. She wakes up from her nap and suddenly there’s a garland around the banister with lights on it! How cool! The next day, a tiny Christmas tree on the kitchen island to discover. It’s been so much fun to watch her as she notes all of the changes, and we have time to talk about it and how we’re getting ready for Christmas day. I think it’s helping her, particularly at her age, to feel secure and not thrown off balance by having too many changes at once.
    Our gift to her is going to be gymnastics classes starting in January, and I think we’re going to keep doing things like that as she gets older. She’ll get enough Stuff from the rest of the family, we can get her one big experience or something else she’ll truly enjoy and treasure and not feel bad that she doesn’t have a ton of gifts from Mom and Dad (or Santa) to unwrap on Christmas morning.

  21. I think for myself there are two major things I would do differently, firstly NO gifts EVER. Teach my child(ren) that money is spent when required not because of some tradition which has been commercially exploited. And similarly- zero charitable giving in the same mindset. We have no ‘duty’ to donate out of manipulation or sentimentality either.
    Money donated to churches or many charities doesn’t ever really touch those in need, I’ve wasted more money that way than any other frankly.

    I was indoctrinated as a child that these were ‘things people do’ but I don’t think it’s right any more all the waste and consumerism and pressure on families.

  22. We typically give our daughter one thing from Santa that she’s been asking for a lot, then a few more useful things. Santa puts things like character toothbrushes and band-aids in her stocking, plus a few small craft supplies. We have a harder time with her grandparents, though. One set gives just a couple of high-quality, useful and/or educational items, like clothes and books. I’m happy with that, but she’s generally kind of underwhelmed by their gifts. 🙂 And the other set gives lots of cheap junk, which she finds very exciting, and makes me want to tear my hair out! But they also give her $100 for her 529, which I love!

  23. My parents gave us 1 gift + stocking stuffers. We did get plenty of gifts from extended family. I really didn’t know others got so many gifts until adulthood. I do like the 4 gift rule.

  24. We don’t stick to the four-gift structure, but we do limit presents in general and Mr. FP and I did not buy any toys this year. Other relatives are sending toys, so we’re sticking to gifts that help expand our three- and four-year-old’s horizons.

    OK, the Star Wars underpants are just for fun. But the boys are also getting things like:

    –better storage for their art supplies
    –child-size aprons (homemade, with velcro instead of ties so they can put them on themselves)
    –a cookbook
    –Klean Kanteen water bottle for phasing out sippy cups
    –some kid’s craft books I found with MY craft supplies

    I may also get them a kid-sized table and chairs for doing art. My mother and grandfather both sent fairly large Christmas checks, but I don’t feel obligated to spend them all on “stuff”… or even all at Christmas. I did not allocate the last of 2014’s Christmas money until October 2015!

    We’re getting ready for Christmas by making presents for friends and family members and sorting through old books and toys to see what’s not getting played with much any more, so they don’t pile up.

  25. We have a new baby and this will be their first Christmas. We decided to do the 4 gift Christmas and had family members Imply we were depriving her because financially we can afford more. Being frugal at Christmas is definitely going against the norm.

  26. We did go a little bit overboard by buying a trampoline this year for the kids for Christmas, but really, it’s for my benefit as much as them. When they’re worn out from jumping they’ll go down easier at night, and I’ll get more work done, haha. But in all fairness, we got it at half price, and it’s the main gift. We got a few little things to go under the tree, but it will be a pretty simple Christmas this year. I do want to get a new book for each of them though.

  27. Great post. We are transitioning to a frugal Christmas for the first time this year, and have kids ages 10, 6, and 3. We broke the concept to them last night. The 10 and 3 year old took it well, but the 6 year old was pretty upset. We tried to stress that we would do more activities together (including seeing Star Wars!), and that seemed to mollify him a bit. We will see how it goes; I hope to write a good post about it shortly after the holiday.

  28. We do 3 gifts (want, need, surprise) plus a stocking for Christmas. We keep it around $200 per child.

    We do talk with our children about how most of their friends will be getting more, and that is ok. We talk about how all families choose to do different things with their money. We talk about why we chooses to manage our money the way we do. Our kids are elementary age and from everything I can tell, they seem on board with how we do the holidays.

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