We don’t have DC, so I’m sure that makes a big difference to Christmas spending, as well as the rest of the year.
We have 10 nephews and nieces between us, it’s usually £40 each, although the one that now has DC themselves, we have slightly downgraded their present but now buy for the DC. It did strike me as slightly ironic that I am still sending £40 cheques to those of my DN who earn a lot more than I do, but it’s what I do.
DH and I both usually have one main pressie and a few smaller items. No specific budget, it could be over £200, but more often around £100 each. Food - if we’re at home, we just buy what we want. If we’re at someone else’s, we take something towards the meal. Gifts for siblings are usually in the £30-£40 range. So all told, with cards and stamps, Christmas probably costs us £1,000-£1,200.
How do we afford it? We habitually live within our means (not having DC makes that much more doable). We don’t save up specifically for Christmas, but we do save. So if we end up spending more than can be absorbed by our normal budget (over a few months) and judicious use of credit card (pay off in full each month, but can shift some normal expenditure onto it to keep the current account in the black) then there is something there to keep us solvent.
In essence, then, we cut our coat to suit our cloth.
My Mum used to give me and DSiblings a cheque for £100 each Christmas and birthday. A couple of years ago, she confessed that she had burned through all the capital she inherited from Dad, and now only had her pension to live on (which is more than our combined household income, btw). So she has cut down on her spending, and now gives £10 gift cards. Which is absolutely fine - you give what you can afford, not what you think you “ought” to give to keep up appearances or impress anybody.