Holidays
Holidays Means Kids, Costs And Considerations
Friday, November 26, 2004
Lisa McKinnon
Ventura County Star
Black Friday, indeed.
The day after Thanksgiving is so named because the post-turkey dinner rush into stores once was thought to coincide with the very moment that retailers could see the red ink on their ledgers fade reassuringly to black.
For many families, however, the "official" first day of holiday shopping can have the opposite effect, sending them into debt as they struggle to make things merry and bright.
A common trouble spot? The urge to splurge on stuff for the kids.
Cute and persuasive, many children have very clear ideas about how to disperse the $702.03 that the National Retail Federation estimates each American consumer will spend during the holidays this year. But there are ways to deal with a child's multipage wish list without going to the extremes of filing for bankruptcy or turning into Ebenezer Scrooge.
As doting friends and relatives everywhere head for the toy aisles today, we offer words of advice from three Ventura County therapists and one nationally recognized financial expert, each of whom has made similar shopping trips for their own families -- and lived to tell the tales.
1. The younger the child, the smaller the price.
"I once heard someone say, 'This year, Grandma's only going to spend $300' -- and I'm thinking, 'The child is only 18 months old,' " said Linda Montoya, a licensed marriage and family therapist who has a practice in Ventura and three grown daughters. "At that age, children often are less interested in the toy than the box it came in."
Aside from the immediate danger of sensory overload, the problem with such largess is that a child may come to expect it every year -- and on birthdays, too. Now is the time to promote the message that less is more, said Dr. Mary Barreto, an Oxnard psychologist who also teaches an urban education course at California State University at Northridge.
"Parents need to know that whatever they give, the ante gets bigger every year, simply because our society is guided by materialism," said Barreto, who has a grown son and two young grandchildren. "If you keep it simple now, you stand a better chance of encouraging the message that (the holidays) are not just about presents."
2. Know your limitations.
It's the most credit card-tempting time of the year. So who better to suggest a safe-and-sane holiday budget than Consolidated Credit Counseling Services, one of the country's largest nonprofit organizations devoted to helping people get out of debt?
In addition to cautioning families not to spend more than the equivalent of 15 percent of one month's worth of take-home pay on the holidays -- cards, gifts, travel and entertaining included -- the organization also has devised a formula for determining how much to spend on gifts for children without breaking the bank.
First, add up what your household brings in each month after taxes. Then divide that amount by a percentage that corresponds to the age of the child in question (see accompanying graphic). In families with more than one child, the trick is to determine a percentage based on an average of the children's ages.
Janet Bodnar, executive editor of Kiplinger's Personal Finance and author of the syndicated weekly column "Money-Smart Kids," believes wholeheartedly in setting gift-spending limits. But a percentage-based formula may be too complicated, she said.
It also fails to take into account any less-is-more inclinations of a wealthy family for whom a percentage of the monthly household income may equal the Gross National Product of a small country.
"I don't think parents think in those precise terms," Bodnar said. "Most people have a dollar amount in their heads, a figure that can be divided by the number of kids and the number of gifts".
"The critical thing is to think ahead, to have a plan so you don't walk into a store and go overboard with the impulse buying."
3. Stick to your guns.
A child's wish list may help rather than hinder the process, Bodnar added.
"Look it over and talk with your kids about what's realistic. If there are 20 things on there, ask them to choose their top five. Then, if something remains that is really out of the question -- it's too expensive or you don't believe in it -- you can talk with them about it. You can have an enormous effect just explaining how you feel about these things."
Also effective: allowing a child to write a when-pigs-fly gift list and then asking him or her to add everything up. When Bodnar's youngest child did this a few years ago, the amount came to just over $1,000.
"His siblings gave him such a hard time about it that he realized it was a little over the top," Bodnar said with a laugh. "The experience made the cost of those items real to him."
4. Present a united front.
Pre-holiday discussions with family members are key to avoiding misunderstandings and hurt feelings when setting limits on what to spend on gifts for everyone, not just the kids. Such discussions also can be very difficult to initiate.
"I come from a culture where you didn't talk about things like that, putting a money value on a celebration," said Barreto, who is Hispanic. "But we have to. The alternative is that someone ends up paying for a gift or a party with a credit card, and they're still paying it off 10 years later."
Being honest about finances also sends a valuable message to children that there are limits to what most families can afford, said Jack Doman, a retired science and history teacher who now is a licensed marriage and family counselor in Newbury Park.
"It's probably too late for this year, but on Jan. 1, have a family talk about the things you want to do together in the year to come -- including a nice holiday -- and how you're going to pay for those things by putting a little money aside each month."
What to do when a child has his or her heart set on an expensive or parent-repulsing toy right! now! and threatens to take said request to Santa, the court of last resort? Explain that the jolly old man works with Mom and Dad, not against them, said Bodnar. "If they believe in Santa, they'll believe that, too."
5. Take alternate routes.
Doman -- father of two, stepfather to four and granddad to three and counting (twins are on the way) -- has found some relief from rampant battery-operated consumerism by adopting some of the gift-giving traditions of different cultures. He appreciates the emphasis that Kwanzaa puts on educational gifts, and that Hanukkah spreads the experience out over eight nights.
When her own children were younger, Bodnar used a low-budget trick to boost the number of gifts under the tree. She wrapped matching notebook sets, shiny new lunch boxes and other items the kids were going to need soon, anyway.
Barreto uses a similar method to get the most bang for her holiday bucks: Gifts for her 5-year-old granddaughter and 7-year-old grandson are mailed to their Rhode Island home in separate boxes. "They get their own mail, which at that age is still a real thrill." But for older children, the thrill may have moved on to more expensive items like iPod digital music players and Nintendo DS game systems. At a minimum of $150 each, such gifts can be budget-busters -- unless extended family members pool resources for a group purchase.
Then again, said Montoya, family members could just as easily pool those same resources for a more practical, forward-looking gift "like a savings bond or a share of Disney stock."
The latter is trading at about $27 per share. With a price like that, you could splurge and buy two.
