SEATTLE — Sticking to a budget during the holidays, particularly for gift giving, can be a real challenge for many of us. One recent survey revealed that about a quarter of all parents had siphoned money off a retirement account or emergency fund, or taken a payday loan to cover holiday spending.
“Personal finances have a ton to do with the stress that people experience around the holidays,” said Natalie Vega O’Neil, the president and CEO of Junior Achievement of Washington, “Our society places such an emphasis on buying gifts and expressing our love for people through the gifts that we purchase for them.”
As a result, she says a lot of people experience the holiday season as anxiety-producing, especially parents. If you have children in the home, there's a good chance that they are feeling it too. Those feelings are not what we are hoping for, “The holidays are supposed to be a time of joy that we spend with our loved ones and that we spend time together.”
It’s a stressor that can be avoided, according to Harborstone Credit Union Senior VP and Chief Experience Officer Lisa Stargus says that stress can be avoided by opening up conversation about financial goals and money management as a family, “Have conversations with your kids to bring them in on the spending plan so that they can make decisions too, ‘OK, what can we sacrifice? What do we really want?’”
Avoiding the pitfalls of instant gratification requires discipline and a bit of a philosophical outlook that can literally pay dividends down the road. Impulse purchases can be a big culprit in ruining a budget. Over time, small savings like $5 or $20 here and there could add up to $6,000 savings for retirement, “It is hard. But if you have that spending plan written down you kind of have your items in mind and then just stick to that. It's so important.”
Engaging children in the budgeting process can go a long way to easing the burden of trying to buy everything they want for the holidays. “Talk to kids about needs versus wants,” Vega O’Neil said. “What is something that we really need, and what is something that we just want as well. And that's a great conversation that parents can have with children.”
Junior Achievement of Washington has programs in place to teach kids budgeting processes and help them understand the reality of family finances.
“We're really proud of the fact that we de-mystify money,” Vega O’Neil said, “No matter what the socioeconomic level of a family is, they're not talking to kids about money and what it means to budget and what it means to save." Because of that children interpret money as a taboo subject that shouldn't be discussed, "We really try to give kids the rules of the road when it comes to experiencing financial health and wellness."
The common mission of financial empowerment and youth financial education led Harborstone to put up a storefront at Junior Achievement’s Finance Park to encourage youth to “Pay Yourself First.” to teach them to save for long-term life goals, build their emergency savings, and save for retirement.
“We're really trying to just make the discipline of savings a cool thing,” said Stargus, “We've got a youth savings where we match $20 to open it. And then if they deposit $10 every month, we give them $20 every quarter". At the end of the year kids who save end up with $220 for their $100 investment.
The bottom line is that with a little planning and a little saving, the holidays don’t need to be a stressful bonanza of expensive shopping sprees.
“It's so important because really, (the holidays are) about meaningful relationships and being present with those relationships in our lives," said Stargus, "The ultimate goal is to be able to cherish your time together, to celebrate and to enjoy those moments that are going to be future memories.”