Money Smart Kids
Handling Holiday Wish Lists
Wish lists are a useful tool, but you shouldn't view them as the equivalent of a grocery order from youngsters to be delivered in full.
By Janet Bodnar, Editor, Kiplinger's Personal Finance
December 7, 2005
This year's award for over-the-top holiday buying by a parent goes to a father quoted in the Wall Street Journal. His daughter, who just turned 9, had an all-electronics Christmas list that included a cell phone, an iPod, a laptop computer and a Nintendo GameBoy. Dad didn't bat an eyelash and, except for the laptop, was willing to consider the other gadgets. "Kids are moving beyond toys," he said.
Whether you're buying toys or electronics, $1,000 is too much to spend to fulfill any child's wish list. Not that lists in themselves aren't a useful tool. Sometimes just writing down all the things they'd like is satisfaction enough for kids and relieves some of the "buy me that" pressure.
Lists also give you an opportunity to teach children how to set priorities. Tell them which things aren't in the cards, and have them rank what's left.
But lists are not the equivalent of a grocery order from youngsters that you should expect to deliver in full. Not only does that steal the spontaneity and surprise from the holiday, but it also teaches kids they'll be instantly gratified with whatever they ask for.
And that's not a good lesson for a $1,000 holiday list, especially when it includes items that aren't age appropriate. Kids expect you to say no. Don't disappoint them.
In the case of the iPod, 9-year-olds are simply too young for a piece of equipment they'll only lose and couldn't possibly use. Kids that age don't even know enough tunes to fill a fraction of the capacity.
An iPod is a great item to have teenagers buy on their own, so you can teach them several valuable lessons about saving and spending money.
They learn, for example, how to make choices: Should they spend $400 on the top-of-the-line video iPod, or half that for the nano?
They learn about delayed gratification, because whichever one they choose it could take them a while to come up with the money.
They learn that being thrifty has its rewards. To encourage them to save, you could offer to match a portion of what they set aside.
And they learn the satisfaction of buying something themselves. With their own cash invested in an iPod, there's less of a chance it'll end up broken or left behind in someone else's car.