For the month of October I am participating in a 31 day event where bloggers post each day on different topics. I chose the topic of teaching kids about money and finances.
One of the reasons many people are in financial difficulties is that it is so easy to satisfy our need for instant gratification. With many stores offering payment plans and the ease of getting credit cards it is easy to buy what you want, when you want it on payments. Sometimes it is fine to buy on payments, unless you get too many than you can afford.
On one segment of the Suze Orman Show, there was a couple with a 12 year old and 7 year old. The 12 year old had gotten into the habit of trying to buy whatever she wanted instead of saving money. Also, recently she couldn’t afford something she wanted, but made the comment that the holidays were coming up and she would be able to afford it after getting money from her relatives that she usually received. Suze suggested telling her grandparents that this year they were going to donate money to charities instead of buying and receiving gifts.
One presentation I gave about money was to a group of Boy Scouts who were about 7-9 years old. The leader said her son had borrowed $40 from her for some legos that he really “needed”. She told him she would charge him interest besides what he borrowed. Each time he received his allowance, half of it went back to her to pay back what he had borrowed. She figured it would be a while before he would decide to borrow money again.
This also becomes a problem for many who have gotten used to receivng a yearly bonus from their employers, but now may not be receiving it or not the whole amount they are used to. Also, for some who have had their income decreased but have not decreased their expenses to match their incomes.
I realize that buying presents is a big part of the holiday season,but if you find yourself in circumstances different than you are used to you have to adjust your spending. I know you may feel like you are letting your kids down if you are not able to buy gifts they want. But if you sit them down and tell them that because of the circumstances, things will have to be different this year.
It is better to deal with the circumtances now rather than putting it off and ending up in more debt later.
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