How Much Money Should You Spend?
Things to Consider:
Ask yourself the following questions to get some perspective on this year’s Christmas.
- What do our kids already have? (Think: toys, books, clothes and gadgets)
- How many people will probably give them more? (Think: grandparents and other extended family)
- What do they need? (Think: clothes, educational toys or books)
- What do they want? (Ask: your kids)
- What do our finances look like? (Think: debt, short-term and long-term money goals)
- What’s our Christmas philosophy? (Think: balance)
Ideas to Get You Started:
With the above questions answered, select a plan to guide your spending.
- Spend the same amount of money on each kid.
Determine your total Christmas gifts budget and divide it evenly among your kids. As you buy for each child, keep track of your totals. When you hit the limit on each kid, simply stop buying.
- Gradually go up in amount by age.
Allot money based on age. You might spend more on your kids when they’re in their teenage years than you did when they were toddlers. As they cross the threshold from preschool to elementary school, increase their budget. Then, when your kids reach a predetermined point of adulthood—they turn 18, graduate college or get married—reduce their budget again.
- Keep your spending low most years so you can go big some years.
Cut your Christmas spending to a modest amount. Then, every five years or so, surprise your kids with something big—a new gaming system, a trip for the family, or any other over-the-top purchase. Your kids’ expectations from year to year will be reasonable, and the big years will really stand out.
- Follow this old gift-giving mantra:
Something they want, something they need, something to wear, something to read. Four gifts per kid—that’s it! You can spend as much or as little as you like on each gift, as long as it fits in your overall budget. This approach will force you to choose purchases more carefully, but that’s okay because you’ll have less to buy.
Sit down with your kids and let them know of any changes ahead this Christmas. This will help set their expectations. It will also be a good opportunity to remind them of the real reason we celebrate and to explain the positives to come from your new plan.
Maybe you’ll be finished shopping sooner in the season and can enjoy more time together as family. Or perhaps the money you save in December will take a big chunk out of your debt in January. Involve your kids in the discussion and be open to their feedback and ideas. We have a feeling that, come Christmas morning, all will be happy.
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