How do I discuss with my children why they may not be able to get every item on their wish list?
The holidays present a great opportunity to help your children learn how to prioritize what they want and how to be financially responsible. Communicate to your kids that it is not reasonable to expect to get everything they ask for. Instead of saying, “We can’t afford it,” ignite their entrepreneurial spirit by asking, “Since you did not get it as a present, what can you do to earn it?” Children need to understand that, regardless of money flow, they cannot always have everything they want. It’s also a good idea to engage your children in giving through buying or making gifts for others. By becoming a giver themselves, children realize that there are limits. Encourage them to divvy up their allowance into save, spend and give, etc.
“At our house, we ask our boys (10 and 11) to prioritize the items on their lists. We talk about what kind of return they will get on a particular gift—how much staying power does it have. If it is something that they will be bored with in a few days, they know it is unlikely something they will receive. But, we encourage them, if they feel really strongly about it, to earn the money themselves to pay for it and sometimes it is important to them and they work to earn the money and sometimes they drop it. I actually think it is part of parenting 101—it is in a child’s nature to plea and be dramatic over the WANT of something, but consistent messages/actions from parents along with an appreciation of the fact that a gift is just that can go a long way.” – Clar Rosso, Chief Operating Officer, California Society of CPAs