A Financial Planner’s Take

Every December, my personal life as a parent and my professional role as a financial planner collide. My financial planning clients echo the same concerns my husband and I have about gift-giving and creating a memorable experience for our children: How much should we give them?

Like many of my clients, I’m raising my children in a very different socioeconomic status than I was raised in. I grew up in a modest but hard-working, blue-collar household in a small community in South Dakota. The only people I knew with college degrees were teachers. My parents gave my siblings and me the ultimate gift: a safe, loving, and stable home where we were encouraged to excel in our own passions and talents. But still, every year I knew that the gifts beneath the tree would be modest. 

Some of my clients have come from truly difficult backgrounds. They saw their parents beg, borrow, and steal to make ends meet, and they knew there would be few, if any, presents beneath the tree. Some didn’t know if they’d have consistent meals. Now as adults with means, their temptation is to give their children…everything. 

This is a massive dichotomy for many parents across generations. Our brains say, “I don’t want to raise entitled kids.” Our hearts say, “I want Christmas morning to be pure magic.” We are left wondering: When you can give your children the world, at least compared to what you had as a child, how much is too much? And when does it actually cause harm? 

In light of this tension, here are three practical tips to help you make thoughtful choices about gifts for your children this holiday season:

Understand the definition of entitlement 

I will lean on clinical psychologist, TedX speaker, and the person most likely to be at the top of my Instagram Reels: Dr. Becky Kennedy. She defines children’s entitlement within the framework of frustration. An entitled child, she says, is a child who isn’t accustomed to being frustrated (barring neurodiversity or other factors).

Dr. Kennedy writes in The New York Times: “When a kid is like, “You didn’t get me a first-class ticket,” it’s not that they expect “first class” so much as they feel that they shouldn’t have to be frustrated.…But I would take the other side: That kid must be having a terrifying experience in their body to feel something that they’ve learned they should never feel. [Parents who use] money to always avoid disappointment can lead to that.”

So how do we ensure our children feel frustration in their lives? How do we make sure that their brains and bodies don’t interpret frustration as real, physical danger?

This is a task that goes far beyond the holidays. It is a day-in, day-out process that challenges us to not fix everything for our kids. For parents who’ve finally got money and have possibly reached a new socioeconomic status, this can be a real struggle. However, no matter how many resources anyone has, there are still choices to be made. 

 Iwant to build those “frustration muscles” in my three children and place them in situations where they have choices. Right now, the decisions range from picking just one flavor of ice cream or choosing between Daniel Tiger and Bluey. But eventually, they’ll have to make adult decisions like which college to attend or how to deal with an unexpected roadblock at work. 

When we teach and model contentment, we give our children a great gift. But let’s not forget that allowing them to experience the tension of frustration is just as much as a gift.

For the holidays, you can practice this by setting constraints. For example, ask your kids if they’d rather have that one big gift or a bunch of little ones. Constrain the amount of money you plan to spend per child on gifts.

Resist soothing your parental guilt with things

This is such an easy trap to fall into: gifts for guilt. We give our children more when we feel bad that we couldn’t be there for their recitals, or when they’re sick and we have to work. We buy them gifts when it’s “our weekend” with the kids to apologize for not being around after a divorce. It’s something we all do, myself included.

But the reality is, when kids grow up receiving things in lieu of time and affection, their North Star for connection is skewed. As parents who have financial means and the desire to raise kids who aren’t entitled, we have to be aware of our own knee-jerk reactions (read: gifting when we feel guilt).

Because time is my most limited commodity right now, I’ve decided to be especially intentional about creating special moments with my kids. This year, I’m setting aside evenings for magical, one-on-one Christmas experiences with each of my three children. The experiences range from looking at Christmas lights to a date to a casual restaurant.

This ties back to the point about building up a tolerance for frustration. I challenge you to process your own uncomfortable feelings around money, the holidays, and gift-giving. It’s important to sit with it so we can address it. 

Make giving a family event

I like to ask my clients how they learned about giving. For me, it was when I was about 12 years old and my mom received a small inheritance. She gave each of us kids $100. It was a king’s ransom – more money than we’d ever touched. But the money wasn’t for us to keep; we had to give it away to someone. I still remember us plotting and planning about who we’d each gift our money to and why.

I want my own children to be excited about giving, but even more, I want them to have an eye for seeing the needs of others and identifying places where they can help. That means we place value – both with money and time – on giving. At their ages, this takes the form of letting them help pick out Toys for Tots or Angel Tree gifts. As they grow, I hope we can incorporate more tangible and service-oriented activities throughout the year and into our annual Christmas traditions.

In the end, this is the inescapable truth of life: there will always be someone with more money and someone with less. The holidays are an important opportunity to help children reconcile this. I’ve found that my happiest clients are those who understand this and find contentment in their situation. During this holiday season, I hope you can give yourself and your children the gift of fostering contentment. I promise, it can be magical!

Have a very Merry Christmas and Happiest of Holidays from me and my entire team!