When financial means don't match children’s gift requests
If you have ever had your child ask for a Christmas gift that is simply unrealistic you are not alone. It’s a tough one. We all want to give our children the things that will make them happy and excited on Christmas morning while trying to avoid over-doing it and spending beyond our means.
Most parents do a good job at keeping kids expectations realistic, but sometimes certain big ticket items make their way to the forefront on their Christmas list. The look in their eyes says they will be so disappointed if they don’t get it. And who wants a disappointed kid at Christmas?
Christmas can bring with it some high expectations and parents feel the pressure. There are lots of kids who work hard to convince their parents that life is just miserable without the latest ‘hot’ item ... oh, and did you know that “ALL of their friends have it and they are the ONLY ones who don’t?”
So how do parents resist these holiday expectations? How do parents keep kids realistic without disappointing, and yet provide a memorable Christmas? The reality is, if parent’s give in, and spend beyond their means, it can be a tough downward spiral of not so happy New Year bills, and often months of cost cutting measures to make your way back to even. From a financial perspective it’s just not worth it.
So what tools can we use as parents to help keep our children’s expectations in check? As a financial professional I think it is never too early to start teaching kids about the value of money and how it works. In elementary terms, it is simple to explain to them that every family has a pool of money from their jobs to pay for home, food, clothes etc. In a simple way, kids can understand there are different buckets for different things. In this sense each family has a Christmas bucket.
Using the Christmas bucket analogy can be an easy way to help kids get a grasp of a limited resource, yet still understand it has a fun purpose for buying a few special gifts. It is a good thing for kids to pay attention to the price tag on the items on their Christmas list with some guidance from mom and dad. They are never too young to learn to appreciate the value of things – even if it is just in bite size pieces.
So here’s where it gets a bit more complicated. What happens when different families and friends have different amounts they spend at Christmas? Adults get it, but it’s hard for kids. It is very tough for Johnny to understand why his friend Bobby got an iPad and why he got a Hot Wheels set.
The Christmas bucket analogy can help here too. It is a good way to explain that different families have different amounts they put in their Christmas buckets. You can also help them understand your family may have more or less in their bucket this year and why. Often by choice different families may choose to put different amounts in their different buckets. For example “Well, right now mommy and daddy are putting more money into the bucket to save for Disney, or the bucket to save for a new family TV, and less into the Christmas bucket this year. Every family is different.” This can really help them appreciate the bigger picture.
If you can explain that the ‘Christmas’ bucket has $x inside it or your family this year to buy gifts for the whole family it helps them get a grasp on the concept that nothing is unlimited. They also understand your family unit is a little team working to share the money in the best way possible.
Parents can help kids understand why certain things are not suitable for a Christmas gift for your family this year. Without crushing their little dream of ever getting this item, you can help them understand this type of thing is something you simply have to work for and save up for yourself. There is nothing wrong with that, in fact, much good can come from this strategy for sure.
Christmas doesn’t need to be a time to throw away the budget, go all out, and pay the price later. Parents should feel confident in doing what’s right for their family. It can be a time to refocus and enjoy the simpler things. Not to mention the spirit of giving rather than receiving, and the true meaning of Christmas.
Stephanie Farrow, B.A., CFP., Stephanie has over 20 years experience in the financial services industry, a diploma in Financial Planning from the Canadian Institute of Financial Planning, and Certified Financial Planner designation. Stephanie has been writing a financial planning column for the local business magazine Elgin This Month since 2010. Stephanie and her husband Ken Farrow own Farrow Financial Services Inc. About our Farrow Financial Team.