A Christmas budget helps kids be reasonable

By Kathy Gurchiek
The Salt Lake Tribune

Those may be cash registers, not silver bells, ringing as even young shoppers pull out cash, debit and credit cards this holiday season. Clinton teenager Brittany Church will be among them, trying to stick to the $20 limit she and her friends have set on gifts for one another.

The Northridge High School senior has overspent on her best friends in the past. She recalled one Christmas when she spent $75 on a good friend, paying for a $50 facial, a compact disc and body lotions.

Her parents put their foot down, insisting she save more and spend less. She was working part time in a bank at that time, and there she learned about budgeting. Following her parents' advice, she kept 25 percent of her earnings and let them put the balance into a bank account she could not access.

Youths ages 14-17 spent $170 billion in 2002, according to the most recent survey by Teenage Research Unlimited, a marketing research firm in Northbrook, Ill., that targets teens. A study by Harris Interactive, a worldwide research and marketing firm in New York, projects that children ages 8 and 18 will spend $116 on an average of 10 presents this year. Church plans to spend a total of $150 on gifts for her parents, friends and "emergency" gifts from the All a Dollar store.

"[Kids] are a key audience for Madison Avenue advertising," said Betsy Treitler, vice president of marketing and communications for SunAmerica Mutual Funds, which has a curriculum to teach youth how to handle money wisely. It recommends the following tips:

• Create a simple budget your child can understand and afford, such as a limit of $20 per gift. It helps to track expenses so you don't exceed your budget.
• Explain interest rates on credit cards add to an item's cost.
• Involve your child in purchasing gifts to show how much you spend and how you make purchase decisions.
• Use a checklist and point out that the gift should be appropriate to the recipient.
• A lot of times purchases are driven by emotion and really and truly you need an overlay of practicality," Treitler said.
• Take children with you and let them select gifts for others for a lesson on pricing. Choose stores wisely to show how to pick the best-quality item at the most reasonable price.
• Give the child the option of receiving one large gift from you or a few less expensive gifts. Provide a budget and have them price out what you can fford.
• Instead of buying family gifts for everyone, use a grab-bag theme with each family member buying one gift for the person whose name is drawn. Also consider who should be on your gift list, said Dara Duguay, executive director of the Washington-based Jump$tart Coalition, which teaches financial literacy to youth. "Usually gifts should be for immediate family, close friends. I think we've sort of gone overboard. Try to decide who actually needs an actual gift and could I give them a card instead," Duguay said. "Sometimes it's just the thought that counts. You can give somebody a $5 gift certificate at Starbucks and they'd probably be thrilled."
• List items for a holiday meal and take your child to the grocery with you. Determine how much the meal costs per person.
• Stretch money by making holiday cards or make meaningful gifts such as knitting a scarf. And don't underestimate the gift of time. "The parents would be thrilled to death if they received a coupon book from their kids if it said 'entitled to one free cleaning of my room,' " Duguay said.

kgurchiek@sltrib.com