How to Build the Ultimate Frugal Gift Closet

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Another week, another birthday party – at least that’s how it seemed when my kids were school-aged. And if it wasn’t a children’s birthday party, it was a co-worker gift exchange. And if not that, it was a wedding. Or a holiday. Or someone you wanted to thank.

Sometimes it feels like life is a never-ending cycle of gift-giving extravaganzas.

When you’re on a tight budget, buying presents can often take out a chunk of money you simply can’t afford at that particular moment.  But gift-giving is something you can prepare for in advance, even if the future event isn’t a glimmer on your calendar yet.

A gift closet can be a major budget-saver. I’ve kept one for years because you just never know when one of those situations may arise, and I never wanted my children to feel embarrassed about going to a birthday party because their present wasn’t “nice” enough. We can talk all we want about how people should just be happy to get something, but let’s be realistic. Nobody wants to be the “poor kid” and peer pressure can be a terrible stressor for a child.

What’s a gift closet?

I just use the term closet because I took a tiny, unused linen closet and drafted it into duty. Your gift closet can be a corner of a pantry, tucked away in your basement, or in Rubbermaid tubs under the bed.

Whenever I see something nice for a steal of a deal, if it fits within my budget, I purchase it, and I put it, fully packaged, in the gift closet. I also stash away sale-purchased gift wrap, gift bags, greeting cards, and tissue, as well as gift bags, tissue, and bows that are in good enough condition to be reused.

I keep tape and scissors with the gift wrapping supplies so that everything is in one place.

How do you build a gift closet?

When my children were younger, I got lots of toys and birthday gifts throughout the year and the girls could choose an item to give to their friends when they were invited to a party. (Is it just me or does it seem like in normal times there’s a birthday party every second week?).  When my daughters were young the average price of a brand new birthday gift that people brought to parties was around $10-20. I’m not sure what that average is these days, as my kids are in their 20s. But, I based my gift purchases on this price range. If I could get a $20 Barbie doll for $6, I saved $14.

These days I don’t buy that many toys, but I do buy well-priced gifts for new babies and the odd child’s gift, just in case.

I purchase items from clearance racks, thrift shops, and yard sales. When I travel, I pick up small, pretty handmade things at great prices.

I have great luck filling my gift closet during the after-Christmas sales and often find other odds and ends on clearance racks and at end-of-season sales.

What do you buy for your gift closet?

What you include in your gift closet will vary based on who you are likely to buy for, what your budget is, and how much space you have to store the items. Here are some of the things I’ve put back for gift-giving purposes:

  • Scarves (dressy)
  • Earrings
  • Winter mittens or gloves, hats, and scarves
  • Wine
  • Alcohol
  • Gift baskets
  • Empty baskets (so I can create my own gift baskets)
  • Bath and body products
  • Toys
  • Baby blankets
  • Craft kits
  • Handmade items from travels (salt and pepper shakers, earrings, bracelets)
  • Personally handmade items (I love to cross-stitch and crochet but how many afghans does one woman need?)
  • Stationary
  • Journals
  • Nice pens
  • Mugs
  • Artsy books
  • Picture frames (especially good for wedding and baby gifts)
  • Candles
  • Puzzles
  • Kitchen linens
  • Travel mugs
  • Stainless steel water bottles

Sometimes you can also buy gift cards at a discount that people received as gifts but don’t plan to use. Check to be sure the card is valid, how much is on it, and whether there’s an expiration date.

When do you use your gift closet?

Generally speaking, I use my gift closet for people outside my inner circle of close family and friends. For those closest to me, I like to choose gifts specifically for them. I do still grab things on sale and put them away for birthdays and holidays, but those items are usually stored in a different area so they don’t get mixed in with the other items.

Here are some of the occasions for which I use my gift closet:

  • Birthdays
  • Host/hostess
  • Wedding
  • Bridal shower
  • Baby shower
  • Office gift exchange
  • Thank you
  • Christmas
  • Graduation
  • Get well soon
  • Just because

If you’re like me, you truly love to give gifts, but you may not always have it in the budget. With a gift closet, you will always have options.

Do you have a gift closet?

Do you have a gift closet or the equivalent? What do you keep in it? What are some of your best finds? Let’s talk about gift closets in the comments.

How to Build the Ultimate Frugal Gift Closet
Picture of Daisy Luther

Daisy Luther

Daisy Luther is an author and blogger. She's the single mom of two daughters and credits extreme frugality and a good sense of humor for her debt-free lifestyle. She is the author of numerous books, the editor of, and is the founder of a small digital publishing company in the emergency preparedness niche.

8 thoughts on “How to Build the Ultimate Frugal Gift Closet”

  1. We have a gift drawer, in bygone days we had 2 drawers with special things in them. Items that are new to your list are special teas, fragrant bars of soap, scented candles, Lindt dark chocolate bars and appealing books. Items are purchase at great sale prices. Sometimes a gift given to me ends up there to be regifted if it missed the mark. These drawers did not begin as gift reservoirs. Ran across the idea of equiping box or drawer with special comforting and encouraging items to have on hand for those bleak days or weeks when one needs an uplift, diversion, remedy or escape. However, my treat hideaway was pirated for last minute gifts and pick me ups for friends so frequently that gifting came to be it’s preeminent function for the last 16 years. Saves one from harried shopping under pressure and overspending in desperation.

  2. My Mom does this. I do it to some degree. I buy small seasonal items after the holiday knowing I will be making gift bags not only for my grands but the neighbor kids and have extras just in case another child comes into our life (new neighbors, a child of a new gf/bf, etc). After holiday sales are my addiction LOL!

  3. I do this too! But here is a very timely tip: right after Easter, go grab up some discounted packages of Easter grass at the stores. These days, they come in several colors, not just green. You may want to get several kinds. Easter grass makes dandy filler material for your gift baskets. A little can go a long way. The “grass” will make your gift baskets look more like they have been made by professionals, instead of just being homemade items, and it’ll look like you paid a lot for them. (I won’t tell if you won’t tell! LOL!) — Frugal Lisa.

  4. You could also include “prepper” items or baskets. I have an abundance of crank radios, bivy sacs, hot hands & little flashlights. Crazy TX weather just because gifts.

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