It may be especially hard to make smart spending decisions at this time of year, and, for many parents, splurging on gifts can be a big hit to family budgets. In fact, 71% of parents with young children say they feel pressure to overspend on gifts for their kids, according to a recent study from Bankrate.
So, when credit cards are swiping fast and presents are being wrapped, it can be an ideal time to pause and talk to our kids about spending — and also take a few pages from their book.
That was the thinking behind a financial education workshop and shopping activity that Bank of America hosted with DREAM Charter School at Bank of America
Winter Village at Bryant Park recently. The students sat down for a conversation on holiday spending and budgeting and then set out to shop for a gift for a classmate, putting into practice the lessons they learned.
They came back and shared some valuable takeaways and tips that can help us all this holiday season:
1. Shop around. One sixth grader, Alejandro Martinez, shared that with the allowance he had, it wasn’t possible to purchase exactly what he’d wanted but he was able to find something comparable at a lower price by shopping around. By not making impulse purchases, and leaving time to compare prices, we can save money and still get the gift we have in mind.
2. Don’t overlook unexpected costs. The students learned to anticipate unexpected costs, like taxes. When on a tight budget, unanticipated costs like tax and shipping can push things over the edge.
3. Set a holiday gift-giving plan and budget. Set a budget first, especially if you have multiple gifts for family and friends in mind and you’re racing against the clock. That was the advice we got from seventh grader Enver Radoncic. Otherwise, some people on your list might get shortchanged.
4. Explore shops in your community. By looking at small businesses, students learned that they may find unique, special and perhaps less expensive gifts that they might not find elsewhere.
5. Don’t get discouraged if you don’t have a lot to spend. Ava Fortson, seventh grade, told us, “A tip I have for shopping (for family and friends) is that the little things matter and even if you are on a budget, you can still have a great gift.”
6. Find the joy in giving to others. A resounding takeaway that the kids had was how much fun it was to buy a gift for a friend. It’s an age-old lesson, but an easy one to forget: sometimes the dollar value of the gift itself isn’t what matters — it’s the thought that counts.
Evelyn Castillo is Bank of America’s Consumer Banking regional executive.