Are you worried that the Christmas gifts you’ve made this year are not good enough?

Certain that your friends and relatives will write you off as cheap and no longer worthy of their love and friendship?

The findings of a recent study might encourage you to think twice before you run out to buy gifts to replace those you’ve made.

Studies from the Stanford Graduate School of Business have found that when it comes to putting out money for gifts, less may well be more.

Researchers discovered that although most gift givers assume that a more expensive present will be more appreciated, receivers don’t appreciate expensive gifts that much more. In fact, the old saying is true: money can’t buy you love.

In one study, researchers surveyed recently engaged couples and found that men consistently thought their rings were more appreciated by their fiancées the more expensive they were. But remarkably, the fiancées did not rate themselves as any more appreciative if the rings were more costly.

The study concludes that men shouldn’t feel bad if they can’t afford to buy the ring they really want.

The fact that the thought counts more than the price tag is important for people to realize, especially in these challenging economic times when people are really strapped for cash.

In a second study, the team asked a nationwide sample of participants to think about a recent birthday gift they had either given or received. Participants described a variety of gifts, including t-shirts, CDs, jewelry, wine, books and home décor items.

Again, those who were givers expected that more expensive gifts would make the recipients feel significantly higher levels of appreciation. And in the same way the women responded to the price of an engagement ring, recipients in this study said they did not feel greater appreciation levels for gifts that had cost more.

“You simply don’t have to spend that extra hundred dollars to get the same level of appreciation for a gift,” says Gabrielle Adams, a doctoral student in organizational behavior at Stanford Business School, who participated in this extensive study.

So here’s the bottom line: Research shows that you do not need to feel guilty about putting spending caps on your holiday gift budgets. Nor should you be shy about giving gifts you have made. Those gifts are uniquely you.

Your recipients will be happy to get any gift at all because it is tangible proof that you cared enough to think of them.

When it comes to gift-giving, it really is the thought that counts!

This article appeared originally in the Debt-Proof Living Newsletter in December 2012. 

"Debt-Proof Living" was founded in 1992 by Mary Hunt.  What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt.  Today, "The Cheapskate Monthly" is read by close to 100,000 Cheapskates.  Click here to subscribe.

Publication date: January 2, 2013