Budgeting

5 Ways to Put Santa on a Budget

Holiday spending can easily get out of control. These tricks will help.

Every year when I update this popular column, I have another success story to tell of a parent who has managed to get holiday spending under control. This year's tale comes from a mom who wanted to tame her extended family's "somewhat ridiculous" tradition of requiring everyone to give gifts to all the children younger than 13.

She finally talked them out of the tradition, she says, "by laying down the law." "I'm pretty much the only one capable now of hosting the family Christmas gathering," she writes. "Because I have a newborn, I told everyone they'd have to do things my way if they wanted me to host. One of the things I requested was that the kids draw names among themselves and give one gift apiece. And I got no arguments from anyone. Yay! I won!"

I bet all of her relatives breathed a collective sigh of relief that someone had finally stepped up and called a halt to the madness. If your family similarly suffers from gift addiction and you'd like to break the habit, I'm happy to stage an intervention with my best advice on putting Santa on a budget:

Don't feel obliged to buy your children everything they want (or feel guilty if you can't afford something because you're worried about your finances). If a toy or gift isn't in the cards, let the kids know upfront. They'll go along with your rules and your wishes as long as you make them clear and stick to them. If they have to go without -- or pay for something on their own -- it not only helps your pocketbook, but it also helps them develop a sense of personal responsibility.

Use wish lists to your advantage. Children need to learn to make choices, and what better tool to teach them than their annual holiday wish list? Once they've made their list, have them pare it down to, say, the top five things they want most. Or give them a dollar amount that they can't exceed.

Get Santa on your side. Tell your kids that Santa faces high demand with limited resources, so he needs a budget, too. Or come up with another creative comeback when kids hit you with the line, "I'll just ask Santa for it." Tell them that you and Santa are a team, and he's not about to go against your wishes by bringing a gift that you think is too expensive, too dangerous or not in sync with your family's values.

Pay with cash. That's one way to make sure Santa doesn't go overboard. Not only does paying with cash put an automatic cap on spending, but it also has a psychological effect: Brain research shows that it's actually more painful to buy with cash than with plastic.

In the same vein, one reader recommends giving kids gift cards. "Give them a set amount that you can afford and that limits how much they can spend. Beats all the holiday fuss -- lines, what to buy, size, etc."

It also has the advantage of giving children a lesson in money management. And I can attest that kids really do like gift cards; in my experience, they're less likely than adults to let them gather dust. (Hint: Web sites such as GiftCardGranny.com and PlasticJungle.com sell gift cards from popular retailers at discounts to their face value.)

Move beyond money by encouraging your kids to consider alternative holiday gifts. You (and they) could give thoughtful presents of time or service -- such as taking over a sibling's chores for a month, or giving Mom and Dad a tutorial in using their new smart phones.

And there's a bonus: Those kinds of personal gifts are a good hands-on way to teach kids the joy of giving. More on that in my next column.

P.S. Feel free to share your own strategies for putting Santa on a budget in the comment box below.

Most Popular

15 Stocks Warren Buffett Is Buying (And 7 He's Selling)
stocks

15 Stocks Warren Buffett Is Buying (And 7 He's Selling)

Berkshire Hathaway CEO Warren Buffett is a bull once more! The Oracle and his team entered eight new positions and added to others in a big way.
May 17, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The Best Stocks for a Bear Market
stocks to buy

The Best Stocks for a Bear Market

The ideal bear-market stock pick should have a defensive business, a long history of dividend growth and relatively low volatility. Here are 10 stocks…
May 18, 2022

Recommended

Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is heading back toward its March highs. What’s driving the resurgence, and will gas prices go down anytime soon?
May 5, 2022
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. But Medicare Advantage has problems, too.
May 4, 2022
10 Things You'll Spend Less on in Retirement
retirement

10 Things You'll Spend Less on in Retirement

We often fret about not having enough cash in retirement. But you might be surprised to see some of the things you’ll find yourself spending less on a…
May 4, 2022
How Our Family Fights Inflation
Budgeting

How Our Family Fights Inflation

Millennials typically spend more than other generations on certain expenses that have been increasing most rapidly. Here are some tips to cut your los…
April 27, 2022