Four steps to successful holiday spending

Healthy finances - November 2006


Susan Beacham

'Tis the season for shopping. And now that they are 14 and 12, Allison and Amanda want to give holiday gifts to, well, just about everyone. Each year their lists have grown longer-to the point that I am overwhelmed, both by the cost and the time consumed by all of this gift giving.

I have found the only way to avoid getting caught up in the emotion-and consequent unplanned spending-of the season is to be disciplined at the outset. Just an hour or two of planning before you shop with your children will help you teach them to stop and think about what and who they want to spend their money on. It will also give you the opportunity to teach two fundamental money skills: goal setting and budgeting.

It makes the shopping process a little more complex, but the rewards, both in terms of money spent and financial lessons learned, are worth it. Here are the four steps to a successful holiday shopping season:

1. Put shopping goals in writing. Nobody in our house-Mom, Dad or the girls-gets to go the mall this year without a list of who they are shopping for and what they want to buy for that person. It's that modeling thing again: We can tell kids the right way to do things, but the way they really learn is by watching how we act ourselves. So this year, resolve that everyone will make a list. This will enforce discipline on your own gift giving and allow your children to learn by doing as well as by watching.

Once your child's list is written, look over it together. This is your chance to make sure the list includes everyone who should be on it-such as siblings and grandparents-and to make sure the list is manageable for them budgetwise and manageable for you timewise.

The next step is to determine who will be paying for which presents. Chances are the list includes everyone from teachers to family to friends. In our house, I usually pay for teacher gifts, but the girls are responsible for friends, siblings, parents and grandparents.

2. Set a budget. This is the really tough part. Go down the list and help your child determine how much he or she would like to spend on each person and write the dollar amount next to the name (the amount actually spent may end up slightly higher or lower.)

Then add it up and compare the total with how much money your child has available to spend. If the total far surpasses your child's resources, then it's time to begin paring the list, either by choosing to spend less per person, dropping some people from the list or looking for gift alternatives such as homemade gifts that cost less but can mean more, especially to parents and grandparents.

One of the very best gifts I get from the girls each year is the coupon book they make, redeemable for things such as a night off from dishes or a 15-minute massage. I love this gift and it costs them nothing but some creativity and time.

If the homemade gifts require supplies that have to be purchased, that amount should go into the gift budget as well. It teaches kids that even small expenditures can make a dent in a budget.

3. Go shopping. Armed with a list, a budget and some ideas, you are finally ready to hit the mall. Whenever possible, go with one child at a time. Easier said than done, I know. But the fewer distractions you have, the easier it is to stay focused and stay on budget. My husband and I each take one girl. It takes some pressure off of me and exposes the girls to our two very different shopping styles.

The key to success here is making sure you follow the list and stay within budget. Check off items as you pick them up. Help your children compare quality and cost of various items and to look for similar things in other stores. The more they learn to delay the impulse to buy now, the better off they will be now and later in life.

4. Review your progress. This is the most important step. After a day of shopping, sit down as a family and see how well each of you did. If one of you found something particularly nice for a good value, share the success. The point of making lists, setting goals, setting budgets and comparing notes after each shopping excursion is to model the process so your children can learn from you and each other.

Following these steps will teach your children how to be smart shoppers-a discipline that once learned will save you and your family many hours and dollars in the years ahead.


Susan Beacham is the founder and CEO of Money Savvy Generation, a financial education company that provides innovative products and services to help parents and educators teach children the basic skills of personal finance, E-mail her at

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