"How much should I spend on Christmas gifts?" has no single right answer, but it does have a right method. The right number is the one you can pay for in cash by the time the January statement arrives, split fairly across the people on your list, with room left for the food, travel and little extras that always appear. This guide walks you through a simple gift budget calculation you can do in fifteen minutes with a pen or a spreadsheet.

Why a gift budget beats a "let's see" approach

Most holiday overspending isn't one big mistake. It is forty small, reasonable-feeling decisions made in different shops, on different days, with no running total. Recent US surveys have put the average household's holiday spending at roughly $900 or more, most of it on gifts, and a large share of shoppers say they are still paying off the previous year's holidays months later.

A gift budget fixes the missing running total.…