Whether this is your first holiday as an independent adult or the cord has long been cut, it's only natural for parents to nag about finances when everyone's together. Expect it. No matter your age, you're still a child to them. But, your goal should be to show them that you’re not the same crazy kid who once blew a semester’s worth of babysitting money on trucker hats (and worse, considered it a fashion “investment”).
We're talking about showing them financial maturity, which is comprised of three things:
- Awareness (having a plan and knowing where your money goes)
- Boundaries (sticking to your plan even under pressure)
- Responsibility (not sacrificing the future for the impulse of the moment)
Within that framework, here are six holiday dos and don'ts to help you be financially mature and demonstrate your status as a blooming money maven:
1. DO use the holidays as an opportunity to pick your parents’ brains for financial information and advice.
Are you enrolling in your company’s 401(k) program next year, or, if you already have one, are you thinking about changing up some of the stocks currently in it? Talk to mom and dad about their investment strategies.
2. DON’T overspend in order to look more flush than you are.
Your parents wouldn’t want to see you go into debt so that you can buy them something fancy. Overspending makes you look irresponsible.
3. DO be honest about and up-front about your holiday spending choices.
Talk to your family in advance about how you choose to direct your dollars: Will you only be giving homemade gifts this year? Are you spending your money on travel to visit them instead of on presents?
4. DON’T let others’ holiday spending set the bar for your behavior.
Just because someone else spends a certain amount on a gift for you does not mean that you have to spend the same. We know that it can be embarrassing when someone spends more money on you than you spend in turn, so you might want to think about a strategy to deal with the situation in advance. Either have a few small, inexpensive gifts (like a pretty holiday ornament or special coffee mug) that you keep on hand to give in a pinch, or practice what you’ll say when you don’t have a present to exchange. We are fans of being honest and appreciative: “Thank you so much for this present! That is so kind of you. I am keeping things simple this year so I am only doing presents for my nieces and nephews.”
5. DO have a budget in place for the entire season.
This should include travel, gifts, and socializing. When you’re with your family, you want to be able to relax and enjoy yourself. We don't want you to be stewing with regret over how much you've spent. Ideally, you should put aside money in advance so that you can splurge during the holidays. If you haven't done this already, then keep this year simple and make a resolution to prepare better in 2010.
6. DON’T get so carried away with celebrating and giving that you lose track of your spending.
The holidays are busy and we know that you want to enjoy the season, but you won't be acting like a responsible person if you get yourself into such a hole that you'll need help to pay your January rent.
Above all, remember that true financial maturity is something that you'll work on over the course of your lifetime. If you overspent this year or found that your budget was inadequate, try to acknowledge where you went wrong, ask for help or advice where appropriate, and take steps to put yourself back on firm footing in 2010. Learning from your mistakes is the best way to show your family that you’re financially responsible.
As for the trucker hats, well, here's hoping they become a hot vintage clothing item one day.