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You check the mail one bright April day.  There’s another shiny toy catalog, some credit card offers, and a statement for your retirement fund.  You don’t want to open that one.  It’s just more bad news, or another bill for repayment.

Your eyes turn to that shiny toy catalog.  You aren’t sure if you should show it to the kids or not.  They always want everything inside.  When you buy those things for them, they’re happy for a little while.  But you can’t help but notice that most of the things you got them last Christmas are missing, broken, or at the bottom of a pile somewhere.

What does one have to do with the other?

What Do Christmas Lists Have to Do with Retirement?

When you're buying Christmas gifts for kids, it's tempting to buy everything on their Christmas list. Do you want to bring a smile to their face at all costs? Here's why you should resist.

A recent survey was released by T. Rowe Price regarding Christmas spending, and it gave some eye-opening statistics.

Of parents surveyed, 53% plan to buy everything on their child’s Christmas list, no matter the cost.  Broken down by generation, the numbers are even more telling.  Of Baby Boomers 33% agreed, Gen X 50%, and Millenials a whopping 75% agreed with this statement.

The youngest generation, which we can assume on average makes the least amount of money, is willing to spend the most on Christmas.


  Source: T. Rowe Price

It gets worse.  Of parents surveyed, 11% will take out a payday loan to make this happen.  Another 11% will dip into retirement savings.  Credit cards help stretch the budget for 56%, and it will take most parents 2-3 months or longer to get it paid off.

Even if you aren’t dipping into your retirement accounts, you’ll be sending money to the credit card companies rather than investing for your future.  That’s a lose/lose situation.

But it wasn’t all bad news.  Parents that save a Christmas budget all year account for 68% of those surveyed.  FYI, Capital One 360 is my favorite place to stash a Christmas fund, because you can’t easily grab that cash when you’re craving pizza.

Interested in building up your own Christmas fund?  Check out my 7 Ways to Pile Up Christmas Money series.

No Money for Christmas? 7 Ways to Pile Up Christmas Money

A Kardashian Christmas on a Roseanne Budget

The number one problem I hear from parents is that it is hard to say no to their kids when it comes to spending.  And I totally get it.  We adore our kids.  Seeing a smile on their face lights up our day.  We want to give them better than we had.

In fact, “giving our kids better than we had” is practically a parenting mantra.  But that advice offers a disservice.  It doesn’t tell the whole story.

[Tweet “”Giving our kids better than we had” is a parenting mantra that does us all a disservice.”]

If giving your children their heart’s desire means going into debt (or adding more debt), reconsider.  Debt is not a sustainable plan.  There’s a wall at the end of the debt.  Even if the credit card companies don’t put up a spending limit, your budget eventually will.

Even worse than credit card debt is digging into retirement or using a payday loan.  Retirement must be repaid quickly or you’ll face steep fines.  Worse than that, you could spend your retirement years begging your kids for money.  (“Honey, remember when I bought every gift on your Christmas list?  Well, now I need some money for groceries.”)

Why Spoiling Your Kids Isn’t All It’s Cracked Up to Be

I have a saying I use a lot.  “There’s a reason kids live with their parents until they’re 18.”  Kids are not miniature adults.  They can’t process decisions the way we can.  They can’t appreciate things the way we can.

If you’re fulfilling every whim of your children, you are missing the opportunity to teach them some great lessons.  Don’t say no to buying for them as a punishment.  Say no because your love for them is bigger than just this moment.

Megan decided to stop buying everything on her daughters’ Christmas lists this year.  She found that most toys weren’t played with after Christmas Day.  “I find something, then I find something better, and before you know it they are tired of opening gifts.”  She decided to cut back this year, and even the grandparents are on board.

In one act of pulling back on gifts, you can teach delayed gratification, contentment, and decision-making skills.  And that’s how you debt proof your kids, my friends.  The lesson that will keep on giving for life.

You’ll also get one more unexpected benefit: relief.  Both from you, when you don’t have to add to more debt and worry.  But also from your kids.  Having a mess of toys is stressful, whether they realize it or not.

Don’t Overspend This Christmas.  Do This Instead.

Warning: Do not let your kids find out that you’re simplifying Christmas on Christmas morning.  This will not go well.  Set the stage for the changes you’ll make starting now.

  1.  Explain to them that you’ll be celebrating a different Christmas this year.  Fewer gifts and more focus on the season.  You’ve spoken to Santa Claus, and he’s on board.  Remember, we aren’t asking permission.  Use as few words as possible, then move on.
  2. Ask your kids to prioritize their list.  What do they want the most?  You will almost never get the right answer if they’re looking at a toy catalog.  Ask them to just tell you the one thing they wish they had.  Then ask them again a week later.  And again a few days after that.  When they finally give you the same answer more than once, you’ll know they actually want it.
  3. Focus more on traditions.  When you look back on your own Christmases, you probably remember emotions and experiences more than the gifts.  Cultivate this with your own family traditions.

Traditions to Try

  • Ashli of The Million Dollar Mama likes to watch Home Alone and eat Nutella and marshmallow fluff toasted sandwiches for breakfast.  An otherwise forbidden breakfast can be a special treat!
  • Krystal of Little Light on a Hill likes to make hot chocolate and popcorn.  Then they take a drive to look at lights.
  • Adrian of Adrian’s Crazy Life has a great way to spread out fewer gifts. She hides larger gifts and leaves a trail of post it notes with clues for the giftee to find their prize.
  • Gina of Money Savvy Living says “[Our tradition] started when my husband and I were dating and going back and forth between family gatherings and we were soooo hungry.  We stopped at Papa John’s to order a pizza.  They said that they weren’t taking any more orders for the night, but had a pizza that no one picked up so they gave it to us! Pizza never tasted so good! And we go back every year… and our boys love it too.”
  • Shauna of Happy Chaos Family incorporates traditions from her husband’s native country.  “We make a traditional English Christmas dinner, with all things British!”  Pass on traditions from your own families!
  • Emily of John & Jane Doe Guide to Money & Investing and Laurie of Learning2Bloom like to keep the focus on spending time with family.

There are many ways to celebrate the season without spending a lot of extra money on gifts.

While it’s tempting to win a smile by buying everything on your kids’ Christmas lists, resist the urge.  They’ll thank you later.  You’ll thank yourself sooner.

Your child’s happiness on Christmas morning is fleeting.  Set them up for long term happiness.  Stop buying everything on your child’s Christmas list this year and make a difference in your finances and your family tree.  No one wants to dread bills long after the giving season is over.

Start the conversation with your family today.

Let’s talk about this on Facebook.


What special traditions can you incorporate this year to make Christmas about more than just buying gifts?