Black Friday is less than a week away, and if you’re planning a big shopping day, you may be wondering just how much you should spend this year on Christmas gifts. I’m not going to tell you exactly how much money you should spend or how many gifts to buy, but I am going to encourage you to evaluate your spending by considering how much enjoyment the gifts will bring.

I’ve shared before things that I’ve learned from two of my favorite frugal books The Complete Tightwad Gazette and Your Money or Your LifeBoth of these books discuss a concept known as The Fulfillment Curve.

The idea behind the Fulfillment Curve is that money spent on our basic needs like food, shelter, clothing, and the like, provide the biggest bang for our bucks.

We all know that spending money on things besides these basic necessities of life is still enjoyable, but to a lesser degree.  An example of this is buying a drink when you are so thirsty you can’t swallow (biggest payback on that money) and buying a drink so you have something to sip on in the car while you drive (still enjoyable, but not the same degree of enjoyment).

Spending on some luxuries can be fulfilling to a certain extent, but there is a point on the Fulfillment Curve where we actually receive LESS fulfillment for the dollars we are spending.   Most of us have seen this play out on past Christmases when a child loves the first toy he opens and would happily spend the rest of the day playing with that one new gift.  After his parents encourage him to open package after package, his enthusiasm for that first toy is diminished, and each new toy is greeted with a little less excitement.

It’s so very important for parents (and grandparents) to remember this when buying gifts for children.  Children and adults alike enjoy opening Christmas presents, but as the stack of gifts mount higher and higher, the enjoyment per dollar spent is proportionately less.

What do we do when it becomes more and more difficult to WOW people with a totally awesome gift?  We usually spend more money, but it doesn’t work.  What we need to do is find that sweet spot on the Fulfillment Curve for us and for our kids where enough is enough.  We must make a conscious effort to stop spending money beyond that point.

The bottom line is that is overspending on Christmas presents does not lead to a more enjoyable holiday.  It often leads to guilt, anger when the presents are not appreciated or cared for properly, and debt. Think about this when you are shopping for presents this year.

How do you keep the gift-giving and buying from getting out of hand at your house?

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