Talking with Children about Holiday Budgets


It is easy for holiday spending to get out of control when you have children. You may be surprised to learn that research shows that what children really want for the holidays is a relaxed and loving time with family, an evenly paced holiday season, reliable family traditions and of course, a few gifts. However, research also suggests that children have much more reasonable expectations on the number and the amount of money spent on gifts.

With this in mind, before anyone goes holiday shopping on gifts for children, they need to set realistic expectations for their family. Parents need to take the first step with their holiday spending plan by talking with family members about what gifts they can expect. For example, a parent might say to a child, "this year you will receive two gifts-one that will be in this price range and one that will be in this price range." Then, the children will ideally provide some ideas on what gifts they would like to receive that fit into that price range.

This is also a great lesson for children in how much things really cost to help them better understand money. If a child asks for a gift that is beyond the boundaries of the spending plan, try explaining why it is beyond your budget by saying things like:

I would like to give you that gift, but right now we don't have enough money for how much that item costs, so can you help me with some other ideas for another gift that costs less? Is this gift something that you might want later? Could we plan that I save some money and you save some of your holiday money so we can buy it later?

By talking realistically with your children, they too can understand what the holiday season is truly about. Commercialism continues to influence everyone's spending--even that of children. If you need to update yourself on some of the latest strategies for getting parents to buy products, watch an hour or so of children's television programming. That update may influence you to have a conversation with your kids about advertising.

Talk to your kids by asking them what they think the ad is about and why they might want to have the product; their depth of understanding may surprise you. University researchers continue to conclude that children as young as four know that an ad is always selling something, and can make a product look much better than it really is. The more that children talk about advertising to enhance their understanding, the less vulnerable they will be to the messages. Talking about advertising is one way to help children develop realistic shopping skills.

Having family conversations about gift expectations and product advertising show respect for everyone involved. When people feel respected, they often act and react in a positive way. Talking about spending for the holidays affirms the affordability of shopping and aligns the expectations of those involved within the reality of family money. Who knows, the result could be less spending with even higher satisfaction levels, by truly enjoying other aspects of the holidays. Discuss spending--it will be worth your time.

Shirley Anderson-Porisch works as a family resource management Extension educator at the University of Minnesota and is an expert in family finance. She has long been a media contributor and is an accredited financial counselor.