Auburn Savings Bank
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Question: My child is asking for a lot of expensive holiday gifts. How can I get her to realize what are realistic gifts to ask for and what aren't? Will I crush her holiday spirit?
Answer: When a child asks for anything that costs money, consider it an opportunity to continue their financial education. More likely than not, you won’t be financially able to meet every request on your child’s holiday “wish list” and that’s okay. Use their request to start a dialogue about budgets, spending and saving that will help them for many holidays to come.
Avoid the Credit Card
If you are tempted to put all your child’s “wish items” on a credit card and deal with the payments later, you may want to rethink that. Not only will you be paying more in the end with interest charges, but you’ll be indirectly demonstrating to your children that they can purchase whatever they want without immediate financial consequences if they use a credit card.
Initiate a conversation about spending, saving, and prioritizing with your child, and talk about what a credit card is and how it can affect your finances. Age appropriate conversations with your child about money and credit will help them grow to be more financially responsible with their own purchases.
Gift Expectations
If your holiday includes a gift giving personality like Santa, a financial conversation incorporating that character can also be explored. For instance, you can explain that, like your household, Santa has limited resources and a budget to maintain. Perhaps he needs to buy feed for the reindeer (just like you buy groceries) and his sled may need to be repaired (like the family car) before he makes his trip around the world or that he needs to pay the elves for their hard work (similar to paying the bills for services your family uses).
Like your household, Santa and his elves do their best with the resources they have at hand. Remember that this holiday season will be impacted by supply chain issues that you as a parent, and even Santa, have no control over. Your child can be a big help to Santa by prioritizing their most wanted items, with an understanding that not all requests can be fulfilled.
Holiday Saving Made Easy
Avoid getting hit all at once with holiday expenses by saving money beginning earlier in the year with an account specific for that purpose.
A dedicated savings account or savings program can help you deposit a specific dollar amount every week throughout the year, ending in the desired amount saved for holiday purchases right when you need it. Figure out the gift budget you’d like to have available for the fall of 2022. Then, determine what amount you’ll need to set aside each week to be able to reach your goal.
At Auburn Savings, we have a Christmas Club savings program specifically for this purpose that anyone can easily enroll in. Check out what options your financial institution has available to help you start saving today for next year’s holiday season.
Part of the fabric of Lewiston-Auburn since 1887, Auburn Savings provides financial products and services for individuals, families, businesses and the shared community we call home. Visit us at auburnsavings.com
