Holiday budgeting tips: 3 ways to give thoughtful gifts without overspending

Americans will spend more than a $1,000 this holiday season, with almost two-thirds of the money going toward gifts, according to the National Retail Federation. That's a stretch for many household budgets.

If this year’s holiday gift exchange is stressing your finances and emotions, consider these three gift-giving ideas that provide meaningful presents or create new festive traditions.

Give yourself

Instead of a thing, put together an experience for your loved ones. Consider the promise of taking a family member or friend to a sporting event, concert or even on a small vacation. A future outing also allows you to save up for it.

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Or, try gifting your time and effort. For instance, promise nieces and nephews a trip to a museum and lunch, says Eric Roberge, a certified financial planner in Boston. “Their parents may even appreciate that more than getting even more toys their kids don't need,” he says.

For older family members, offer to do yard work or other chores each month that may be difficult for them. Donate time to run errands or babysit for adult siblings with young children.

Gift with love, not money

Find meaningful presents hidden in your own closet or attic. Consider re-gifting jewelry and other special family heirlooms to older nieces and nephews. Little cousins would love old Lego sets, Barbie dolls and other toys your children have outgrown.

Commit to only small, thoughtful gifts presented with a handwritten card. Find one small item such as a fancy hand lotion or book that you personally love and buy one for each family member.

If you’re crafty or good in the kitchen, consider handmade items or freshly baked cookies or candies. Gather your best family recipes in a photo book for newlyweds in the family.

Play a game

Families can play Secret Santa to simplify gift giving and reduce spending, says Paul Fain, a certified financial planner in Knoxville, Tennessee. Cookie or ornament exchanges can be fun, festive and frugal. Or, bring out the friendly competition by playing Yankee Swap, White Elephant or Dirty Santa.

Fain’s family one year drew names and then went to Target with a $20 limit. “I still wear the Avengers t-shirt my son bought me,” he says.