Everyone likes to be generous during the holidays. Whether it is buying big-ticket items that the kids cannot live without, flying home to see grandparents, or perhaps even giving to the local homeless shelter, spending makes us feel better. Some will even use it as a motivational factor where you tell yourself to do a little more overtime in the coming year or pick up a side-hustle.
However, according to financial experts, nearly 40 million people are still paying off credit cards bills from last year’s holidays. Now, with average amount of spending predicted to go up 4.1 percent, 73 percent of shoppers will put charges on the credit card in 2018 instead of 58 percent in 2017. Those who do pay off their credit card debt are taking longer, going from an average of 2.3 months last year to an estimated 3.2 months in the coming year (which is another month of interest charges). These and other factors can mean trouble for overgenerous parents.
Avoid emotion-driven spending on the kids
Most parents try to buy kids everything on their list. While this makes children happy in 2018, it may mean that there will be less for the kids in 2048 when the estate is settled or even bankruptcy much much sooner. Some tips on how to manage the emotions of meeting expectations include:
- Do not use a list: Talk to the kids and see what they would like versus getting a long list with lavish items they may not even really want.
- Manage their expectations: Encourage restraint in the kids, even telling younger ones that Santa rewards those whose wish lists were modest with just a few things. Also, have honest conversations with older kids about the importance of managing money during the holidays.
Good intentions are sometimes not enough
The realization that a parent is struggling financially often settles in after New Year’s Day. Then, the bills start pouring in and it becomes obvious that serious measures need to be taken. Contacting a bankruptcy attorney is not what many have in mind for starting 2019, but these legal financial tools are meant to help parents and others get their heads back above water. This means that they can once again enjoy the holidays in the years to come.