Kids Need a Little Reality This Holiday Season

Kids Need a Little Reality This Holiday Season

Monday, December 8, 2008

filed under: danielle hoston

Momlogic's financial expert Danielle Hoston: HELP! My daughter thinks I make $1,000 per second!

Me: What do you want for Christmas this year?

My 8-year old daughter: A laptop, a puppy, a webkin, a Nintendo DS, a cupcake maker for my friends and ummmm... a spa thingy.

Me: How much do you think Christmas costs?

My daughter: $101 sometimes. No ... actually $200.

Me: How much money do you think Mommy makes at work?

My daughter: $1,000.

Me: How often?

My daughter: Every second.

Every mother wants to give our children their every heart's desire. When that desire falls outside of our budget, we often feel like failures as parents because we think we've disappointed our children. As a single mother struggling to build a career, there were many Christmases that I tried to convince my daughter that she didn't get something that she wanted not because I couldn't afford it (which was the truth) but because "she didn't really want that anyway."

Here's two great gifts to start the conversation with your children about money:

Monopoly - This isn't the same Monopoly that you played when you were a kid. It uses debit cards instead of cash in some versions but still teaches budgeting and the value of owning investment real estate.

Cas Flow for Kids - Developed by Robert Kiyosaki of Rich Dad, Poor Dad, this game is the kid's version of the adult game, Cash Flow. It offers true-to-life income and expense scenarios and teaches children how to "make money work for them."

TIP: If the board game versions are too expensive, there are less expensive software versions.

As parents, we're here to equip our children with what it takes to make them successful adults. When it comes to money, it means teaching them to make smart money decisions - not teaching them excess, irresponsibility, and all of our other dirty money habits that we most likely inherited from our well-intentioned parents.

All of this said, the most important gift that you can give your children this holiday season is an honest and age-appropriate conversation about money. Let's empower them by demonstrating that there is nothing shameful or fearful about our finances by openly discussing it with them. I started my new mission to create an even more open dialogue and asked the question many of us are avoiding...

Me: What should we do if Mommy can't afford everything you want for Christmas this year?

My daughter: We should just get a Christmas tree and dance around it.

Luckily, I think I can afford that.

How do you teach your kids about the value of a dollar? Comment in the momlogic community.

14 comments so far | Post a comment now >>

I gave up explaining to family about money years ago….I just go to work 6 days a week and make sure they have what they need. I had to give up living in a house with 4 woman!!!!!!!!!!!!

- Carl Marer

Posted 12/09/08 05:30 PM

LOL @ Carl’s comment! I started a discussion group about this topic and want to hear from you! How much do you or should you share with your children about your finances? http://community.momlogic.com/group/personalfinance/forum/topics/how-much-do-you-share-with

- Danielle Hoston

Posted 12/09/08 05:49 PM

I don’t care about the cost. I think I give my son everything he wants because of my deprived childhood. I never got those damn thundercats or Voltron. FUDGE!!!

- Jose Guzman

Posted 12/09/08 06:16 PM

With two teenage boys living in my house I have no problem letting them know when things need to tighten up and when situations call for going shopping. At 16 you can get a check card for your children and go over that monthly statement with them. Its a great way for them to see how they are spending money. Then, if you pay them it goes something like this; 8 car washings at $10 per = one new Xbox game or a pair of Nikes ……. wow, cost that much dad?………….lol

- Kenneth Bank

Posted 12/09/08 07:13 PM

Danielle, you hit it right on the head. Too many times we pass on unquestioned habits that lead us and our offspring into situations of uncertainty and ignorance. Money has been such an issue in my life….how to budget it, manage it, leverage it, how to make it work for you. Sadly, we are not taught that. And usually we learn, but it’s a costly price to pay. thanks for the candidness. Much appreciated

- Dat Dude

Posted 12/10/08 02:04 AM

Great Blog!!! Christmas during times of economic uncertainty can be the hardest times a family can go through… Your words of wisdom are truly needed in light of where we are today!!!!! please keep up the good work… Zo

- Zo

Posted 12/10/08 12:40 PM

I loved the line about dancing around the Christmas tree. It sounds like you’re raising a balanced little girl. Looking forward to the next post.

- twosense

Posted 12/10/08 02:48 PM

I am teaching my kids to put the cost of things into hours spent - how long it would take to earn the money for something if they made $5 an hour? That video game my son wants for $60 is not so crucial when it costs him 12 hours. My daughter no longer wants the $75 boots she saw online when it costs her 15 hours.

- Nicole

Posted 12/10/08 08:31 PM

Great blog! It’s tough to find the balance between being honest with your kids about your family finances, and putting an unnecessary load on them about how much money mommy has in the bank. What I’ve started to do it talk about the cost of things, how that cost fits in to the budget and how an item they want fits into our lives (i.e., do we really need it?). This seems to help them understand spending a little more, without stressing them out. Still, my 8yr old thinks I have a money tree growing in the yard and my 4yr thinks she’s rich when she finds a quarter in the couch cushion, always pulling out said quarter to pay for groceries.

- Leslie

Posted 12/11/08 02:08 PM

I’ve done a great job in convincing my daughter that Santa is responsible for all the gifts. Whatever I can’t afford to buy I just tell her “Santa must have run out of that.” -Mel

- Mel

Posted 12/11/08 04:41 PM

That was a cute story. I learned my spending habits from my mother and basically she taught me to just spend what you have and worry about the rest later. Budgeting is something that children need to learn early. A financial adviser told me something she did with her grand daughter. She got two jars, she told her grand daughter to put quarters in each jar. In on jar she would give her 10c for every 25c. Over time her grand daughter could see how much the 2nd jar grew compared to the first jar. She eventually put her money into a savings account and looks at her statement every month to see how much her money is making.

- Selene

Posted 12/11/08 09:57 PM

Excellent Blog! I wish my parents were more active in teaching me about finances when I was child. It wasn’t untill\ I was already in credit card debt before my dad started giving me advice on finances. Luckily, I wasn’t over my head in debt.

- MJ

Posted 12/14/08 03:31 PM

Danielle, excellent blog, thank you. This is a very tough, and real, topic for many people this year. I see this Christmas as a great opportunity to teach our children the importance of the difference between wants and needs. Certainly a difficult conversation. Glad my only real concern is my 2 year old nephew who doesn’t know any better…yet. Also looking forward to the next blog. Well done.

- Eric

Posted 12/14/08 10:27 PM

Wow, great blog! I am teaching my daughter first, how to keep track of her money. When she receives any money, allowance, gifts ect… She has to log it in her ledger. Whenever she wants to but something,or just put money in her litlle purse, she has to log her withdrawl. And she has to write down what she spent her money on. We do have discussions but at this stage they’re about earning your money and keeping track of how you spend it. This has helped somewhat. Since she sees where her money goes, there are times she will decide NOT to spend it. We still have work to do because when those moments occur, she simply decides to spend Mine! Baby steps, baby steps. Final note: She, on her own, bought tickets to her school play with her saved up money, to surprise me for my birthday. She felt so good that she’d saved enough to do that. I felt so good as a mom! -T.C.

- T.C.

Posted 12/16/08 01:14 PM