Giving Kids The Gift of Economic Reality
Friday, November 28, 2008JEFF YASTINE: For most children, the holidays mean one thing: presents. But at a time when the economy has taken a turn for the worse, many families are having to cut expenses, including how much they spend on gifts for their kids. As Dana Bate reports, there are ways to manage children's expectations though and keep a holiday budget in check.
DANA BATE, NIGHTLY BUSINESS REPORT CORRESPONDENT: 'Tis the season to be thrifty. That seems to be the jingle this black Friday. But singing that tune to your kids isn't so easy.
NYTHA DAVIS, MOTHER: I explained it to them that this year, look, you may not get everything you put on your list, I'm going to try to get one or two, but everything may not happen.
BATE: Janet Bodnar is the author of "Raising Money Smart Kids." She says it's a good idea to be up-front with your kids as we head into the holidays.
JANET BODNAR, DEPUTY EDITOR, KIPLINGER'S PERSONAL FINANCE: If you say to your kids, look, you know, we really need help this year. We're really in a situation that we have never been in before, certainly the kids have never been in this situation. We need your help. This is a family thing. The kids are going to rise to the occasion.
BATE: Well, one can hope.
UNIDENTIFIED MALE: It doesn't matter what you tell them, it's Christmas.
UNIDENTIFIED MALE: They want what they want. So you need to buy them what they want.
BATE: At the very least, financial planner Pam Shortal says it's a good opportunity to teach kids about budgeting.
PAMELA SHORTAL, MANAGING DIRECTOR, HARRIS SBSB: This is a good time to get back to the basics and for the family as well as teaching the children that it's important to spend less than you make.
BATE: So how do you scale back without feeling like a scrooge? Janet Bodnar has some ideas: have your children write up a list, but tell them to limit it to the number of gifts you are able to buy. Be up-front about gifts that are off limits. Use this as a teaching opportunity. Give them a budget and ask them what they'd buy with that money. Bodnar also suggests the gift of time, a dinner with mom or an outing with dad or getting one big gift for the whole family, like a TV or a vacation. OK, but will those ideas really fly with today's kids? Some parents say yes, but others weren't so sure. If you told her her Christmas gift this year was time with mom, what would she say?
UNIDENTIFIED FEMALE: I don't know.
BATE: Bodnar says don't let your kids push you into overspending.
BODNAR: You are still the parent; you still set the rules. If you want to change the rules, change the rules. Have confidence in yourself. You're the boss here. So don't let the kids. They might push back, you push them back, too and say this is what we're going to do. Things are different this year.
BATE: This economic downturn won't last forever and the current spirit of thriftiness probably won't either. But holiday traditions are yours to make and if you start new ones this year that help you stay within your budget, those family traditions can last a lifetime. Dana Bate, NIGHTLY BUSINESS REPORT, Alexandria, Virginia.
