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?
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.
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.
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.
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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.
- 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.
- 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.
- 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?
So helpful, thank you! Love the idea of incorporating traditions rather than money-wasting.
Once we took a spur of the moment trip to California. It really was so much fun. Years later though, what my daughter said changed my expectations forever. We were reminiscing about that trip and she said, We should do that again. I replied, What, go to Disneyland? No, we should get in the car and you not tell us where we are going. That was the so much fun!
WHAT? Boy had I missed the boat! It was the memories, not the glitz and glam part that she holds most dear. The fun surprise of trusting mom and dad, silly games in the car, climbing on rocks at the rest stop, sleeping all piled up on the hotel bed. Disney was fun, but that was by far not her strongest memory of the trip (she was 7!). As it turns out, Christmas memories and gifts work exactly the same way. Our kids don’t care what we got them for Christmas most years, they care that we got the same decorations out, ate the same thing for dinner, played the same games, watched the same movies and sang the same carols at church. Memories are rarely expensive but last the longest!
I absolutely love this. We get hung up on details and forget the magic of being a child. And your idea of hopping in the car and just going sounds fun! I’d love to surprise my kids with a trip some day.
Got a group text from my stepmom last week saying, “Can we please limit the gifts to just the 8 kids this year, and no more than $10 per kid?”
Gosh, what a relief. My parents have always done a huge Christmas deal with tons of presents for everyone. It overwhelms the occasion, and the kids get overstimulated and everyone is focused on stuff. Now, the kids might actually play with each other instead of stuff and the adults can just concentrate on the important stuff….mimosas!
Mmmm…mimosas! It’s awesome when you can get the whole family on board! I think that grandparents are at least as likely to overspend as parents are.
The Christmas craziness has been a really hard habit to break, but over the years it is slowly getting easier. On Christmas day my kids are so happy and excited not because of how much I spend or how many gifts they get – they are happy just because it’s Christmas! The debt is never worth those fleeting moments on Christmas morning.
What a great post. It is sad to think about the generation being raised that is so focused on things. Materialism is so crippling to our financial goals and security! I hope my girls have a much more rounded appreciation for the holidays. Thanks for including me in the post!
Thanks for sharing with my audience! 🙂
More is defintely not better in the toy department. By the time the kids are old enough to really care they are old enough to understand that stuff costs money and that you can only have so much of it.
More stuff is definitely not the answer! Thanks you for sharing this!
Great post! I don’t have any children yet but I ask my niece and nephews what is on their list and then ask their parents what on the list is parent approved. Normally, I get something that is a need.
I am trying to find a tradition that I would want to do since this is my first Christmas as a wife but I haven’t figure out what that is yet. Any ideas?
The stats you shared are literally SHOCKING (about buying all the gifts on a kid’s list)- we are expecting our first baby and we’ve already agreed we will raise it with as few THINGS as possible… and with the expectation of few things. A lot of my friends have judged me pretty harshly because of this, (I’ve asked for no toys at the baby shower) but I believe that freedom from materialism is a gift in itself. We will still buy the baby toys / presents. But not LOTS of them. Reading this just enforced my feelings even more! Thanks for linking up at Share the Wealth Sundays.
It’s so interesting about the breakdown in how the different generations deal with Christmas and debt. Being a late-end Baby Boomer (born in 64), and also being a public school teacher, I have seen with my own eyes the changes in children and therefore our society over the past several decades. I’ll be sharing this article! I hope more young parents will take your words to heart!
Thanks so much!
Love this post. There is so much pressure on parents to spend, spend, spend at Christmas, but really it’s making memories which is important, not how many presents you buy. I was talking with people recently about how much they were spending on their babies and toddlers (my daughter will be almost 2 this Christmas) and it really shocked me, then I started second guessing myself and thinking, oh, maybe I should be buying more. I haven’t, but it does make you wobble. x #FridayFrivolity
It’s definitely eye opening to talk to other parents about how they spend. We had a time when we went a little overboard (nothing like the stats in this post, though). Over the years, we’ve learned that the simpler Christmases are the best ones.
Those are some scary statistics! The saddest part is that the kids who get everything are growing up expecting instant gratification and will probably fall into debt as soon as they’re on their own. Holiday traditions are definitely more important than lots of gifts and will become the memories that are treasured for a lifetime.
We’ve taken the Experiences trump Things mantra, and applied it to our boys’ Christmas gifts. They’ll get a few small things each year, and one grand experience.
Last year, it was a Disney cruise. This year, a trip to Paris and Iceland. It’s not exactly saving us money. But… we’d be doing the traveling anyway, so giving it to them as their Christmas gifts instead of hundreds of dollars worth of wrapped plastic toys is a step in the right direction.
Cheers!
-PoF
There’s no way I could even think about buying everything on my nine year olds list! We’ve had several talks this year about the true meaning of Christmas, because he circled every single expensive thing in the toy catalog. Ugh! I don’t feel bad at all about saying no to selfishness.
It’s a great life lesson, isn’t it? Thanks for reading!
Is it ok if I just go with eating Nutella in bed 🙂
Terrific article to highlight that it only takes a little effort to properly reflect on spending choices during the holidays. Make the right decision and focus on time together through activities also.