The holiday season is always a dangerous time for your budget. It can be far too easy to get caught up in the festivities and end up charging much more on your credit cards than you should. This can leave you with lots of regrets once the bills start coming in the new year.
While this is true for everyone, it can be especially hard for parents to stick to reasonable spending limits during the festive season. After all, many moms and dads want to make the holidays magical and memorable for their kids — and that can lead to emptying your bank account just to make your little tykes’ dreams come true.
The good news is that finance expert Dave Ramsey has some holiday shopping tips for parents that can help you to avoid spending you’ll regret.
1. Set a reasonable budget
According to Ramsey, the first thing parents need to do is to “set a reasonable budget,” before they begin to shop for holiday gifts for kids.
Ramsey believes setting a budget is essential because parents end up spending a small fortune on gifts, which they often can’t afford. He points to the 2022 State of Personal Finance survey conducted by Ramsey Solutions, which revealed that the average family with kids anticipates spending $1,300 on Christmas in 2022.
That’s a lot of money, but things add up quickly when you start trying to fulfill all of your children’s desires. Rather than spending what it would take to buy everything on your kids’ wish lists, Ramsey instead believes you should start by deciding how much cash you actually have — and then allowing your budget to dictate what items end up under your tree.
“Be sure you set your gift budget before you go shopping,” Ramsey warns. “Don’t let your kids’ lists tell you how much money you should spend — your budget should do that.”
2. Figure out what’s fair for each of your kids
Ramsey next suggests figuring out what amount of money you should spend on each child. This advice is important too. Most parents like to keep spending reasonably even among their children, while others might opt to spend a little more on older kids who tend to have more expensive gift lists.
Whatever works for your family, it’s best to figure it out before you start buying. Otherwise, if you end up spending a ton on one child to get their desired present, you may have too little left over in your budgeted amount for the rest of your kids. This could lead to overspending.
3. Stick to it
Finally, the last step Ramsey urges parents to take is to actually stick to their budget — which can be harder to do than it seems.
“Be careful about sneaky buys that drain your budget, like stocking stuffers,” he advises. “Don’t get swept up in creating a stocking that looks like it was loaded up by St. Nick himself.”
Making a big list of all the things you’re going to buy — including the prices — can be a great way to follow this suggestion.
If you take each of these three tips into account, you can give your kids a great Christmas, without breaking the bank or draining their college funds. They’ll likely be grateful for the presents you have under the tree and for the wise financial example you set for them as well.
