"My wife and I have a combined income of $80,000. We have two young kids so we find it very hard to save. How much would you recommend being the most we can put on our credit card for Christmas gifts for our kids?"
Well I have to admit you certainly put me on the spot with this question. If you want my honest opinion then my initial reaction and answer to your question would be nothing. Do not put a single dime on a credit card to pay for Christmas gifts for your children.
Given your situation, I am going to assume that you are living paycheck to paycheck and whatever you put on the credit card would stay on your credit card long after your next statement period. Knowing the extraordinary interest that you would incur, I cannot possibly recommend any amount to put on your credit card.
There are some cases where this may not be the case. Maybe you or your wife are expecting an end of year bonus above your usual monthly pay. If this is the case then I could justify purchasing gifts on your credit card because you would have them paid before your due date with the end of the year bonus. In this case, I would suggest you definitely not spend more than your after tax bonus in gifts.
I also want to point out that even though, you could spend your entire after tax bonus, you probably should think long and hard before doing so. If you are not saving, you need to start. Now is as good a time as any. Of course buy your children gifts, but perhaps save some of it as well.
Now in case you don’t receive a bonus, I am not saying do not spend anything on your children for Christmas. I want to clarify that what I am saying is do not buy these gifts with a credit card . If you have cash, then use that. If you have to sell something like in It’s a Wonderful Life, then do that. Perhaps you can find some great deals on gently used items through Craigslist or your local Goodwill stores. Getting into credit card debt is a slippery slope, and you will never see me encouraging it in a situation such as yours.
Finally, I have to emphasize the importance of a budget. Perhaps you already have one and if that is the case, then this should be easy for you. If not, I strongly encourage you to try to set a budget and stick to it. You cannot spend more than the income you have coming in. Either way, starting today figure out how much you want to spend for Christmas on gifts for everyone that you intend to buy. Divide that number by 12 and set that amount aside every month. I know it isn’t brain surgery, but the discipline is much harder than the math. Christmas is something we can plan for and therefore we should.
I know this probably isn’t the answer that you may have expected. Perhaps it was. I do not envy this decision, but you and your children will be in much better shape next Christmas and each subsequent one after that if you do not go down the path of spending money you don’t have by purchasing gifts with credit cards. Merry Christmas to you and your family!