Teaching Your Kids About Santa And Money (Spoiler Alert)

Even the most well-intended and prepared parents must confess to the crime of inventing worldview improvisationally when faced with the query of inquisitive little ones.  We may even be building our own personal value system when faced with the inherent pressure of questions surrounding everything from the proper utilization of money to the existence of Santa Claus.

But this isn’t necessarily a bad thing.  This is one of the reasons having children is such a transformative experience.  Sure, you could just make something up when faced with the Whats, Hows and Whys, but it would be better still to actually determine a response in which you genuinely believe, even if that belief is newfound, and even if that belief is shrouded in mystery or fantasy.

That is why my wife and I decided to perpetuate the cultural myth of Santa Claus with our kids—because their little hearts and minds seem to yearn for mystery and fantasy, and because we both seemed to gain more than we suffered from that well-meaning parental deception.  But one area in which mystery and fantasy would serve our children poorly is the arena of money.

No, painting a mysterious picture of financial fairies and monetary monsters will likely do more harm than good.  I’m not discouraging creativity in teaching your kids about money, but I would caution you against personifying or deifying it.  It simply gives money too much credit, pun intended.  We best serve our children when we illuminate its uses as a connector of people, a facilitator of relationships, an extension of our values and a tool in reaching our goals.  (Ok, so maybe you should put it a little simpler for them.)

Most kid-oriented financial systems wisely segment money for children in one of three buckets: one each for spending, saving and sharing.  After years of reviews of both physical and digital systems, I’ve finally found one that works well for our family, and I’m happy to endorse it here: iAllowance.

What I Like:

1)     It’s fun.  Without sacrificing the functionality, its use of interactive icons easily recognized by kids brings the program to life.  I found many systems that lacked a fun-factor entirely, which made me question whether the developers were even qualified to render advice on parenting.

2)     It’s intuitive.  I’m far from a “techy.”  (I don’t even know if that’s how you spell it!)  But with a couple helpful online tutorials, I was an iAllowance expert.  Where other programs were clunky, this one flows with seamless and simple logic.  I can get where I’m trying to go and accomplish what I’m trying to accomplish without undue effort.

3)     It’s customizable.  When I open the home screen, I see my kids’ smiling faces.  I can use the program to manage Share, Save and Spend piggy banks, manage a regular allowance or goal-oriented funding, mange chores (either tied to an allowance or not) and also include a non-monetary reward system with stars.  Some people only use iAllowance for chores and some only for allowance—I use it for both.

4)     It works!  Eureka, it works!  You’ll find no shortage of systems online that promise the world, but I found more than one that simply didn’t follow-through on their pledges.  Some systems acknowledged glitches and I’m sure other misfires were human error—but if I can’t figure out how to make it work without too much effort, I’m not going to use it.

What I don’t like:

There is one major limitation to iAllowance, in that it is only accessed on iPhones, iPods and iPads, and while it’s not worth the cost of new phone or tablet that you don’t already own, I’ve found it worth a great deal more than the $3.99 I paid for the app.  Some are still attached—as I was initially—to the more tactile representations of physical piggy banks in which the kids can see their money accumulate.  But I ultimately concluded that virtual money will be the predominant way my kids transact throughout their lives, so why not start them on it?  Plus, I don’t have to get judgmental looks from a teller wondering if I’m headed to a “gentleman’s club” with all those one dollar bills!

Healthy dealings with money certainly isn’t the most important value to pass along to your progeny, but it’s one of the most important because it’s used—for better and for worse—in nearly every other aspect of life…long after they stop believing in Santa.

Holiday Blues: A Remedy

Beat-the-holiday-blues-2It’s gone.  Just like that.  What’s left, but a large, dead plant to dispose of, lights and decorations to put away and a budget that enjoyed more merriment than it could handle?  The holiday blues are setting in…

How do we counter the holiday blues?  Well, last year, one of my neighbors kept his Christmas tree up… until March!  I suppose that’s one way to process the emotional downward spiral, but it seems that denial will only get us so far.  I offer, then, a recommendation that can 1) improve your life, 2) give you a lasting infusion of holiday spirit AND 3) potentially put some of those dollars you spent throughout the holidays back in your pocket. 

The recommendation: Purge & Give.  How?  Meander throughout your house and analyze what you haven’t used in the past year and then… give it away to someone who’d likely find it a treasure.

There certainly are exceptions to the one-year-rule.  Camping gear or tools, for instance, are things that you may not use for a year but fully intend to use in the future and should keep on hand.  The most effective place to start vetting is often your closet.  If you haven’t worn an article of clothing or pair of shoes in over a year, the chances are very good that you don’t need to hold on to it (or them).  Then inventory your basement, garage, shed, desk, wallet, purse and car.

If you’re the parent of younger children, as I am, the purge-and-give process is a great one to eliminate surplus former holiday and birthday presents AND to teach your kids the benefits of these worthy pursuits at a young age.  Don’t do it when they’re asleep, hoping they’ll never miss anything, but instead involve them in the process.

How, then, might this process deliver on the aforementioned benefits?

  • Simply put, a simpler life is a better life.  Margin—personally, spatially and financially—is our friend.
  • ‘Tis better to give than receive?  You may not feel that way about your brother-in-law, but try giving to someone really in need or an organization devoted to helping those who may not have received ANY presents this time of year.  Doctors tell us we get a wave of endorphins from giving—the more direct, the better—and an endorphin rush is just what the doctor ordered for the holiday blues.
  • Assuming you itemize when doing your taxes, you should be able to deduct your charitable contributions—even for in-kind items.  You may be surprised, but if you haven't purged for several years, your contributions to charity could add hundreds, or even thousands, of dollars to your personal balance sheet.  (Talk to your CPA about your specific situation.) 

You still have time in 2010 to receive these benefits.  Take a walk around the house and head to your local Salvation Army or  Goodwill donation center or homeless shelter.  They’ll be better for it… and so will you.

And, as long as you promise not to use this only to provide solace for a lack of action on your part, this short video of “The Collector’s Collector” on the show, “Hoarders,” will help you put your situation at home in perspective:  http://www.youtube.com/watch?v=KvBGNXi1gXs&feature=fvst.

Have a blessed—and simpler—New Year!

The Gift That Keeps On Taking!

07-12-27-lexus-red-bow “Let’s be honest. No one ever wished for a smaller holiday gift.”  So starts a TV commercial that seems to be running in nearly every commercial block throughout the month of December.  Since it’s not my desire to shed a bad light on the company who developed this marketing pitch, I’ll not mention them, but only give you a hint: it rhymes with Schmexus.

They make excellent cars, and many would argue they do so at a reasonable value as compared to other luxury car makers.  The beef I have with them, and nearly every other luxury car maker, is that they ask us to actually make the purchase of one of their vehicles a Christmas present.  What does that do to your gift budget?  Is stacking another $37,975 (to over $50,000 with all the options) on top of your existing holiday gift budget doable?

Cousin-eddie As Cousin Eddie said in Christmas Vacation: “Clark, that’s the gift that keeps on giving the whole year!” (Watch that hysterical clip by clicking HERE.)  For most, the purchase of a new car is the gift that keeps on TAKING the whole year… or two, or five or six.  If, for example, you get the top of the line stocking stuffer, even with “attractive financing options at 1.9%,” you’ll be paying over $850 PER MONTH for FIVE YEARS!  

I’m not expecting ad agencies to provide us with an ethical foundation as consumers—it could easily be argued that it’s their objective to melt away our common financial sense this holiday season.  But as I find myself staring longingly at luxury SUVs beset with bows as big as a Christmas tree, I thought it might be valuable to remind myself—and anyone else who might be susceptible to an indulgent moment this time of year—that a $50,000 present that requires an amortized mortgage on a depreciating asset isn’t really a gift…but instead, a burden.

I’m going to take off posting this Friday, so MERRY CHRISTMAS!!

And check out WBAL-TV 11 in Baltimore this Sunday, the 26th at 9:15am, when I’ll be sharing some of these thoughts live.

Belts and Budgets

1269613009money-belt Ahh, the holidays.  That time of year when spirits are lifted and offenses are forgiven.  When the smell of wassail and a freshly cut Fraser fir wafts through the home.  And, of course, it’s a time when both belts and budgets are stretched, almost as if it’s tradition.  I try never to ask of you something that I’ve not struggled with and asked of myself.  So it is with humility that I offer this prescription for a merrier Christmas and happier New Year regarding belts and budgets:

Eat and spend less.

Deep, huh?  Actually, it is.  Most of the mechanics of successful money and life management are embarrassingly simple; it is WE—you and me—who are hard to manage.  This stuff may be simple, but it’s certainly not easy.

The first question we should ask is, “Am I a natural?”  Do I have an innate proclivity for success in the realms of food and financial-based consumption?  Some people are blessed with a body that can incur a high-caloric blitzkrieg and not seem worse for doing so, but that’s a tiny minority.  For the rest of us, we must reach a mathematical equilibrium in which we’re expending a proportionate amount of the calories we take in.  Then, each of us has a physiological disposition that either makes it harder or easier to reach a comfortable and healthy balance.  That last component is what makes dieting a challenge—many of the variables are unseen.

Budgeting has a similar set of variables.  Money comes in and money goes out.  The primary objective is to spend less than you take in, and the “physiological disposition” equivalent in personal finance is the amount, frequency and variability in the level of income.  It is, necessarily, easier for a family with one monthly paycheck and a set of monthly bills to manage household cash flow than it is for a two-income family with self-employed individuals responsible for the income.  But regardless of the level of complexity, believe me when I tell you that there are natural budgeters—those who have a tendency to spend less than they take in—and those with a predisposition for over-consumption.  Hopefully you’re one.  (Frankly, I’m not.  It’s work.)

The first step towards managing each of these topics well, especially around the holidays when the challenge is exacerbated, is to know where we are weakest.  For food consumption, behold the “French Fry Rule”:  Know the extent of your will power.  For me, I’ve learned that I AM capable of saying NO when the server asks me, “Would you like French fries with that?”  But once the fries are on my plate, I will, invariably, eat them!  Know where (and also when) your will power is strong and weak, and play to your strengths.

When it comes to financial overindulgence, consider “The Four Forms of Money Rule”:  There are four primary forms of money—cash, checks, debit cards and credit cards—and each of us is most responsible with one and least responsible with one.  Personally, I am least responsible with cash.  If cash is in my pocket, much like if French Fries are on my plate, I’m going to dispose of it!

The key to success in both healthy budgeting and eating is to KNOW YOURSELF.  Don’t allow yourself to deceive…yourself.  Be honest and give yourself a fighting chance by playing to your strengths and avoiding your weaknesses.  And when you start to hear that lie in your head, pouting that you’re depriving yourself of a well-deserved treat, remind “it” that the balance and comfort you’ll feel when the temptation has passed is a far more desirable than the momentary indulgence.  As my good friend, Pat Goodman, tells me, “You must not only want what you want; you must want what your wants lead to!”

And if you think I’m asking too much of you, check out Leo Babauta’s blog post entitled, “The Case Against Buying Christmas Presents.”  I’m not necessarily suggesting you go that far, but Leo shares some great wisdom in here that speaks to the underlying causes of holiday-specific excess in spending and takes it to another level.

Gifting: The Pressure is OFF

A-christmas-story-ralphie-santa We’re now in the midst of Hanukkah and Christmas will be here in a few short weeks.  The Season of Giving, right?  And with all of the great things about this season also comes gifting stress.  You know how it works…You get together with someone this time of year for lunch or coffee and they come bearing gifts.  You immediately feel like a putz because you didn’t get one, so as soon as you leave, you head to the mall and buy them a gift…out of guilt.

Or, your children spend the entire month of December hearing about all the presents that their friends at school are going to get.  They start listing out the aggregate of ALL the gifts they’ve been hearing about at school on a daily basis and you are burdened by the thought that your child might be hanging his or her head at the lunch table when all the kids are discussing what they got.  So, you get them…everything.

You have a new boyfriend, girlfriend, fiancé or spouse and this is your first holiday season together, so you decide that you’re going to show them you know how to do it right.  And, you’re scared to death that they are going to outspend you, so you make sure that they don’t…out of fear.

Fear and guilt are not good motivators.   Thoughtful, heartfelt impulsion, on the other hand, is a great way to gift.  So, if you’re a last minute gift buyer like me, I suggest that you sit down and think about who you feel impelled to give a gift to, and then actually apply a budget to each gift – a guideline on how much you want to spend.  NEVER use credit to pay for a gift, because then you start the New Year off with a lower net worth than you had the day after Thanksgiving.  If you free yourself from giving out of guilt or fear, you’ll enjoy the season all the more.