Putting Santa on a budget

Marketplace Staff Dec 18, 2009

Putting Santa on a budget

Marketplace Staff Dec 18, 2009


Tess Vigeland: So… are you done yet? Only a few more days to finish The List. At least it’s not as long this year. That’s what the good people at the NPD market research firm tell us. The recession and 10 percent unemployment have forced the average consumer, whoever that is, to whittle the holiday gift list from 16 people last year to just 10 this year.

Now, it’s a safe bet that the kids weren’t the ones to get the boot. But how to explain why their stockings aren’t quite so stuffed this year?

Janet Bodnar is here to help. She’s with Kiplinger’s magazine and the author of “Raising Money-Smart Kids.” Welcome back to the show.

Janet Bodnar: My pleasure Tess.

Vigeland: Remind us how old your children are.

Bodnar: My children are now 27, 25 and 21, so I’ve been through it all, or at least a lot of it.

Vigeland: All right. So how did you handle this whole gift giving business around the holidays. It does seem like a time of year when people kind of go a little nuts.

Bodnar: Exactly. There are a couple things that I would tell parents, and I have used these techniques with my kids. You can make your own rules stick within your family. So don’t be afraid of your children, don’t be afraid of their peers, don’t be afraid that “Oh my gosh, if they don’t have piles of gifts, they’re not going to love me anymore.” Whatever your custom is or your family custom is, the kids will buy into, literally.

Vigeland: But it sounds like then you really want to start that very early on, so there is a certain expectation that perhaps there aren’t going to be a million gifts under the tree, so that you’re not switching things kind of in mid-childhood.

Bodnar: It certainly is helpful to do that. Tess, I do hear from a lot of parents who say, “We’ve dug a hole for ourselves by piling on all these gifts year after year.” And now when you have a situation where the economy isn’t so great, we have to pull back and you have to offer some explanations.

Another thing that often happens is that grandparents — gotta love them — they really do, and other extended family members, really want to do things for the kids and you often have a situation where the kids are so inundated with gifts, with stuff, that they don’t know what to do. They’re totally overwhelmed.

Vigeland: Let me take a couple of the elements that you just mentioned separately. If you tried to have a certain strategy through a portion of childhood and then maybe mom or dad loses a job, how do you talk to the kids about maybe Santa’s having a little tough time?

Bodnar: You always want to make sure that the kids know that mom and dad and Santa kind of work hand in glove or hand in mitten, if you will. So Santa’s not going to do an end run around mom and dad, as far as buying or bringing gifts that are appropriate

Vigeland: (Laughing

Bodnar: Well it’s true, right?

Vigeland: Absolutely.

Bodnar: So if kids, even in good times, if they’re asking for something that is too expensive or not appropriate for the kids, if you tell the children this and then they pull the “well, I’ll ask Santa for it.” No, Santa’s not going to bring it if mom and dad don’t agree with it. And if things have to change, in an age appropriate way, you have to be honest with them. Just a very simple explanation for younger kids and again, you can couple it with a change in your family customs.

Vigeland: And a second follow-up was, this idea of well, you can have all the strategy you want within your family, but that’s not necessarily going to keep grandparents, aunts and uncles and nieces and nephews from going bananas when you don’t. How do you get that message out to extended family or should you even bother?

Bodnar: Well, I think it’s worth bothering. And if there are grandparents and extended family members out there, listen to this: Your generosity is certainly appreciated, but within reason. Are you giving gifts that are of lasting values to the kids? Are you imparting lessons to them that you, as a grandparent can do? You know, lessons of thrift, saving, planning for the future, that sort of thing. That is the kind of legacy that you could really leave to grandchildren and you’re in a wonderful position to do that. Not to mention, if you really do have extra cash, contributing it to a college fund for which your children and grandchildren would be eternally grateful.

Vigeland: But you talk about them being eternally grateful, but up until a certain age, they’re not going to understand that this is something that’s good for them. How do you get the kids excited about that?

Bodnar: There are a couple things. My parents used to do a really kind of a neat thing. They would give the kids cash that would be equal to the age of the birthday. So let’s say they were 10 or 12 years old. They would get $12 cash and that was just their money to do whatever they wanted with and then they would get a check for a little more, not a lot more, but you know, we the parents, can decide what we wanted to do with that. Did we want to put it in the bank, did we want to cash it and give it to the kids? So the kids always had something.

So yeah, you’re right, Tess, they ain’t gonna get excited about mutual funds when they’re 10 years old. But you know, that could be the little extra thing that they’re doing. And then when they get to be 16 or 17 or 18, and there’s this little cash cushion there that they have for college.

By balancing this out — it’s always a matter of balance — and I think that maybe that’s what happens within families, things get a little bit out of kilter.

Vigeland: Janet Bodnar is editor of Kiplinger’s Personal Finance magazine. And we’ve been talking about putting Santa on a budget. Janet, thanks so much and ho ho ho to you.

Bodnar: And my pleasure and as my daughter used to say when she was young, merry missmas ho ho ho!

Vigeland: Very good. Thanks so much.

Bodnar: My pleasure.

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