Barefoot Investor Scott Pape says giving kids cash for Christmas is not a good idea
Barefoot Investor Scott Pape has called on parents to avoid giving out cash to their children for Christmas, declaring it a complete cop out.
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Exclusive: The Barefoot Investor is urging parents to give their kids experiences rather than stuff and said handing over cash is a no-no for youngsters — declaring it a cop out.
Scott Pape said parents should put thought into what presents they hand over and not focus on the amount spent.
New research from a News Corp survey found while some parents shell out hundreds of dollars to win their children’s affection, more than half of parents (52 per cent) say their kids won’t even remember what they receive at Christmas.
Pape said focusing on giving time and memories always won out over expensive presents or cash.
“It should be about experiences and not stuff and money,’’ he said.
“Giving cash feels like an economic transaction if it’s just cold-hard cash.
“It is kind of like a gift card and when you can’t be bothered going into a store and picking something out.”
Christmas is just two weeks away and many parents will be rushing to fill their Santa’s stockings but this can result in overspending and heavy reliance on credit.
More: The best way to get through Christmas without racking up debt
More: Barefoot Investor's top Christmas spending tips
A new News Corp survey of 2600 parents found about three in four parents believe kids of today have much higher expectations than they did when they were growing up.
Pape said it was too easy to be sucked in by marketing and thrown money down the drain this silly season.
“Kids are the most marketed to generation in history,” he said.
“They are not only comparing themselves to kids down the street and kids at school, they are comparing themselves to kids on Instagram and what they get, there’s heightened expectations.”
As for taking the easy route and just handing kids cash as a gift, 76 per cent of parents believe it’s a bad idea.
As for how much cash to shell out the results found there was a mixed bag on what parents would spend.
About 12 per cent of parents said they would go overboard and spend more than $500 on each child at Christmas.
But on the flip side about 13 per cent said they would keep spending to a minimum and would splash less than $50 per child.
Child psychologist Dr Michael Carr-Gregg said parents often spent too much money on their kids to “overcompensate” and encouraged them instead to give experiences not possessions.
“There’s a tendency for parents to feel very guilty about their parenting and they overcompensate by giving their kids way too much stuff,” he said.
“My preference is to give them an experience or buy them one thing they want, one thing they need and one thing to read.”
He said kids wanted to form an identity and experiences helped do this whether they are “good, bad or indifferent..”
Pape urged parents to take the time this festive season to talk to their kids about what Christmas means and not just focus on what presents they rush to unwrap.
“Talk to you kids that not everyone is as lucky as they may be,” he said.
“It is a time for giving but the idea for kids is it’s about what they are getting not giving.”
FAST FACTS:
- 59 per cent of parents think children get good use of their Christmas presents
- 53 per cent struggle to get children to help around the home
- 59 per cent use debit to pay for Christmas items, 12 per cent use credit, 29 per cent use both
- 21 per cent buy Christmas presents for the following year to save
- 73 per cent spend the same amount on each child
BAREFOOT INVESTOR’S XMAS TIPS:
1. Focus on experiences rather than physical gifts.
2. For adults send an email telling them you are doing Secret Santa to save money.
3. Leave your credit card at home.
4. Go all out on the wrapping and be tight on the gifts; younger kids won’t notice anyway.
5. Buy, swap and sell your rejected presents (you know you’re going to get them).
Originally published as Barefoot Investor Scott Pape says giving kids cash for Christmas is not a good idea
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