The holidays tend to be a time of year when the word “budget” strikes extra guilt and shame into the hearts of parents. Either we stick to the budget and feel bad not getting “enough” for our kids, or we blow it and then feel icky about it and shamefully pinch our pennies all January long. Especially for parents of tweens, teens, and young adults — whose wish lists aren’t all Magna-Tiles and Play-Doh but expensive headphones and Sephora skincare — gifting adds up fast. So, how might you talk to your kids about your spending limits this holiday season, especially if they’re used to a really big pile of presents you just can’t provide this year?
It’s really hard as a parent to feel like you can’t give your child everything they want. There’s nothing better than seeing their eyes light up when they open a gift they’ve been pining for. And honestly, the older our kids get, the harder it is to not keep up. Kids can be mean, and you never want yours to get picked on because their new cup isn’t a Stanley or they didn’t get the new Xbox like everyone else at school. But none of the guilt around gift giving guarantees you can afford it, unfortunately. So, what to do?
For starters, go ahead and let go of the idea that your kids understand anything about how money works. They don’t, according to Mary Clements Evans, certified financial planner, accredited behavioral financial professional, and author of Emotionally Invested: Outsmart Your Anxiety for Fearless Retirement Planning.
“Lots of people may have tried to tell you what it was like to have a child. Until you have a child, you don’t know what it’s like to have a child. The same thing happens with money. Until somebody has to handle money, they don’t understand. So, it’s not what you say to them. It’s what you get them to do.” Evans recommends getting kids on a spending budget early. Maybe you give them an allowance or they earn it, but introducing small sums lets them learn to spend or save according to their goals. The only way to learn how far a dollar goes is to want one and not have it.
OK, but what if you haven’t been doing that? (It’s a New Year’s resolution idea, sure, but help a mom out here.) “One of the things I always tell people is nobody can have everything, but you can have some things,” Evans says. She recommends asking your kids to think about what they want most and prioritize their list in order of what they’d most like to receive. “When you sit down and talk with kids about this, I think you’re going to find your kids pretty responsive.”
If your child is used to a heap of gifts under the Christmas tree, yes, they will have to shift their mindset. But that isn’t a reason for you to feel guilty. It’s a teachable moment.
“What a great lesson to teach your kids. This is a great opportunity,” Evans says. “Let them know when they’re an adult, some years are going to be better than others. Some years, you’re going to have more money than others. If they’re old enough, try to teach them a little bit about inflation. What happens if somebody loses a job? I don’t think you can teach kids those lessons too young.”
You might also touch on how social media makes us all want so many more things than we really need. Getting stuff gives us a hit of dopamine, no doubt about it, but it’s not going to actually change our lives or make us happier. As adults, they won’t remember whether they got that name-brand makeup product, but they’ll remember driving around to look at Christmas lights with the windows down and blankets over their laps.
“Presents don’t create happiness. They create pleasure, and that pleasure is fleeting. And when that pleasure goes, you need another thing or stuff to create the pleasure. Does that make sense to you?” Evans says as an example of what parents might ask their kids. “It used to be that keeping up with the Joneses was just the house and the car, but that’s not it anymore. It is everything. It’s the clothing. It’s where you go. It’s the furniture in your house. We’ve got to teach our kids not to get into that cycle.”
Evans works with personal accounting clients whose children had elaborate Christmases with all the gifts they wanted, but now their parents have no retirement fund and need to move in with them. Those adult children are no longer pleased they got everything on their wish lists so long ago, she says.
If you are unsure how much money you should spend on Christmas gifts this year, Evans urges you to make an appointment with a certified financial planner. She says anyone old enough to have children should have a plan for contributing to their retirement as well as meeting all their other needs, after which you can set a budget for things like gifts. If you can’t afford that this year, you should still try to determine a number and stick to it.
“You can’t hit a target you don’t have. And if you keep moving that goalpost every time somebody asks for something, that means every day you’re making the decision, Can I spend this money? Should I spend this money? And you’re guilt-ridden the entire time. If you have a budget of, say, $2,000, OK, great. Spend that $2,000 with abandon. That’s what’s in your budget. You have it. Don’t go over it. Then there’s no guilt, at least up to the $2,000 mark.”
So, instead of trying to spend your way into protecting your child — from feeling less than over how many presents they got compared to classmates, or bullied by some little turd at school because their cup isn’t the water drinking vessel du jour — Evans recommends doing what’s best for your family financially long-term and parenting through the rest.
