There's a big gap between Scrooge and Santa. Somewhere in between is room to teach your kids how to spend wisely but generously during the holidays.
The miser, Scrooge, makes life miserable for those around him at the beginning of "A Christmas Carol" with his disdain for the holidays and penchant for penny-pinching. These days, I'd wager many of us are resisting our inner Scrooge as we grapple with rising costs, flat wages, and trying to please family members during the happiest time of the year.
Including kids on the conversation about your family's finances is especially important around the holidays. Here are a few ideas to discuss with them:
1. There's a budget and you're not budging. Explain to your kids that you must set limits for spending on gifts. Show your kids a list of toys or electronics that fit into the price range you can afford. That will help them see there's plenty of room for the cool stuff.
2. Prioritize what you want. Ask the kids what's more important — a bunch of gifts under the tree or a memorable holiday family trip? Discuss the pros and cons. If your family dynamic allows, let your kids vote on which one they want.
3. Show children how fast money disappears. When your kids are old enough show them a household budget for a month. Where does the money go? How much is left over after bills are paid? This helps kids to see the dollars in real terms and they can understand how much is available for discretionary spending, like gifts.
4. Be realistic about saving. Make sure your kids understand that once a budget is set, it's written in stone — unless you get a bonus or an unexpected windfall. Also explain that some of the savings should go to charities to help those less fortunate.
5. Talk about what aren't buying. Whenever you decide to buy something, you're making a choice not to put that money to use somewhere else. Talk to your kids about what you give up by spending money on gifts and trips.
6. Be honest. If times are tough for your family, your kids probably already know it. It's nothing to be ashamed of. There may not be a lot of extra cash for gifts this year. Explain the situation to your kids and it will help them set realistic expectations for the holiday.
7. Get creative. Face it, kids would take the moon if you could lasso it. They should; that's part of being young. But as parents, we have to set parameters. If you can't save enough for the "big" gift, explain to your children that they can look at a consignment store for the same item that's been gently used.
8. Keep the credit card locked up. Kids must learn that paying on plastic for gifts means delaying the pain. No holiday is worth that agony.
9. Save through the year. Starting in January, talk to your kids about saving. Sure, this year's gift wrap is still in the garage garbage, but this is when the savings start for the next holiday season. Teach your kids to set a budget and stash a little bit away each month. When December rolls around, they'll be glad they did.
10. Demonstrate the best gifts - the ones that come without the bow. Remind your kids that no matter how many or how few items they receive this holiday season, the most important gifts are the unseen ones — our health and love for each other. You cannot put a price tag on those.