How to Tell Your Children that Santa Is Broke This Year

What to do if Santa is broke this yearWhat do you tell your children when times are tough? Is Santa affected by the recession too? How do you tell your children Santa is broke?

One of the worst mistakes that we can make is to pretend that nothing is wrong and continue operating in the same manner that we always have during the holidays when our family is struggling financially.

It becomes hard to maintain the status quo when times are tough, and it is especially tough around Christmas and the holidays. And, trying to continue the same way is a horrible mistake.

We get used the good times with tons of presents under the tree, showering friends with presents, and decorating your home like an Oswald. But, what should you do when times are tough this holiday season? How do you tell your children Santa is broke this year?

How to Tell Your Children that the Family Is Broke

It can be a devastating blow to parents who are used to showering their children with presents but must now make difficult budgeting choices when giving Christmas and holiday gifts to their children. Here are some tips to help ease the pain and discomfort for everyone in the family.

Be Honest with Them

I’m not suggesting that you come out and tell your children Santa doesn’t exist. But, I am suggesting that you manage expectations as early as possible before things get out of hand. Your children probably know more than you would like them to about what is going on in our economy and how it is affecting your family.

It is very hard to get much pass them. So, you may be able to manage their expectations this holiday season and tell your children Santa has been affected by the recession. Maybe he is not giving as many presents to everyone this year.

Limit Gift Giving to a Certain Amount

My wife instituted a brilliant system in our house where Santa Claus only brings our children three gifts each Christmas because that was the same number of gifts that the Wise Men brought Jesus. Not only does it reinforce lessons and values that are important to our family, but it also limits our costs during the holidays. I know that a lot of parents also require children to get rid of or donate to charity presents on a one for one basis for new presents that they will receive during the holidays.

You should also look carefully at how many of your friends you purchase gifts for. Maybe this year is the year that you simply send cards instead of presents. Most likely, your friends are going through the same challenges you are as well and will more than understand.

Another way to afford presents for your friends and family is to use your credit card rewards points to get restaurant gift cards and other gift cards. My wife and I charge everything on our American Express card in order to earn reward points to use during the holidays for gift cards to give to our friends.

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Consider Earning Extra Income

If you absolutely must try and keep your holiday celebrations the same as in previous years, you may want to consider getting a part-time job this holiday season. Or, consider getting a side hustle.

Many local retailers are looking for seasonal employees to fill in during the mad rush of the season. Another added bonus is that you may also find work at a store you will ultimately shop at that offers an employee discount.

Now you can do your Christmas gift shopping at a discount. I’m not talking about starting a second career, but earning a little extra income during the holiday season can be the little extra help that you need to continue enjoying the number of gifts and lifestyle that you are used to.

It is not easy to continue celebrating Christmas and the holidays as you have in the past when there are so many people currently unemployed and struggling. How do you tell your children that Santa is broke this year? It is a fine line that you have to walk in order to manage their expectations. But, one of the worst things that you can do is continue like nothing is different.

What about you? Have you had to tell your children that your family is cutting back on Christmas giving this year? How did you tackle it?
How To Tell Your Children Santa Is Broke

24 thoughts on “How to Tell Your Children that Santa Is Broke This Year”

  1. Those are great ideas. My parents tried to cut back a few years ago, but I think it back-fired on them. My mom decided each person would only get three gifts, but then decided that gift meant box and bought just as much stuff as she always had and grouped everything into related boxes. Some of the boxes were kind of ridiculous in terms of how big they were and how much was in them. Also, since there were more electronics that Christmas than in previous years I think the overall spending was increased rather than decreased.

    (Seriously, though, when your youngest kid is almost out of college do you really need to try to recreate the magical wonder of childhood Christmases? We only get to see one another 2-3 times a year, so just spending time together really was enough.)

  2. I really like your idea around being honest. I think honesty is really important within a family unit and that kids need to learn this early on. Hiding things and lying is not a good example as to what they should do. Kids are very resilient. They will move on.

    • That’s a great point about resiliency. I often forget that about children. They do bounce back very quickly. Great point!

  3. Placing reasonable limits is a smart choice. As difficult as it can be to cut back, it’s the sensible thing to do, especially if you are facing other problems like debt. We limit gift buying to our immediate family, and all our relatives are aware of and ok with this. We found it helpful to begin a dialogue about this, and it took the pressure off everyone.

    • Hunter,

      That’s a great point about keeping everyone in the loop. I can see that if you came out and told your extended family that you are only giving gifts to immediate family, then that would take a lot of burden and weight off of everyone’s shoulders. Great point!

  4. All great ideas. I especially like being honest. My parents never actually taught me any personal finance, but I always knew what was going on, how much is spent on what, what are we saving for… That was enough for me to get started and be financially disciplined.

    • My parents tended to hide the financial troubles they were in. It wasn’t until college that I really fell in love with personal and corporate finance and knew that’s what I wanted to pursue for my degree.

  5. I like the idea of settting a goal and working for part of your gift. that makes one value the gifts even more.

  6. I will tell them straight up and frankly. No need to hide the truth from your kids. But, to compensate for not spending as much in years past I would make up for it with creativity

    • That’s a great point about creativity. You do not have the break the bank to come up with some of the best gift ideas.

  7. This title reminds me a lot of my childhood.

    My Dad was an Engineer and the company he worked for (Lockheed) figured out it was cheaper to lay everyone off in December than to pay then for two weeks during their shut down. Then, they hired everyone back in January. My Dad called it the Christmas Goose.

    We were pretty broke for a couple of Christmases in a row and we got to pick one gift out of the Sears catalog. After the third or fourth year, my Dad told them he was never coming back and he found a new job.

  8. We have 5 children 3 still at home. Our youngest is 9 we have sat down with them all and told them how much every thing cost to have our house and to maintain what we already have. I also explained to the older teenagers that we will be doing a tradition in my family. When times were tough with 8 kids my mom made the 12 months of christmas. We each got 12 boxes to open (ours were in a tower). We got to go shopping with mom once a month and get something that we wanted with the homehade gift card that was in the box for that month. We had a blast not only did we one on one time with mom a rare thing with 8 kids we made some of the best momories doing that. I have explained this to the older ones they are all excited and explained that the little brother will still be getting more items from “santa” since he is still on the fence about “santa”. I hope that my children get to have great memories from these hard times.

  9. I think being honest, as long as it’s done appropriately is important. We have a set limit we spend on each child and often don’t spend all of it thanks to so many gifts the grandparents give. That allows us to hold back the rest of our budgeted money to do things for them throughout the year.

  10. We weren’t raised believing in Santa, but if we were, I do think my parents would have just let me know that Santa had a tough year. In our household, the good years meant we could have the camera we wanted and the harder years led to more creative ideas. 🙂

  11. When I was around 12 times were tough for us, so my folks were honest and let me know that we won’t be able to afford too much for Christmas. I noticed we were dealing with problems on a regular basis and I didn’t want my folks to get into debt just for one day.

    So I got the message and the holidays were still nice, since we were together. I don’t think it’s good to mess up the finances for good just to keep the appearances. If there’s no money, that’s it, all will pass.

    • That’s a great point that I didn’t even consider. It is not worth it to ruin years of hard work and set up a hole that ill take years to dig out of for just one day.

  12. I like the idea of just setting a budget and not going over it. Often, younger kids don’t even know the difference if you spend $200 vs. $1000…

    • That’s a great point that took me years to understand. My young children do not understand the difference in most cases between a $100 toy and a $50 one. I just saved myself 50%!

  13. I was always taught from a young age that “it’s the thought that counts” and not to value the gift on it’s actual market value but to think about how that person went through the trouble to get me something, and the thought they put into getting it.

    I don’t have kids now but when I do I am hoping to make Christmas more a time about family, love, and eating good food rather than a bunch of gifts. Lets all make each other something and call it good. No need to hit our credit limit in order to get a bunch of junk.

    • Levi,

      I think that most parents start out with the same hope…that they will make the holiday and Christmas season about more than simply consumer gift giving. It is the follow through that often hems us up.

  14. Times are certainly hard but that shouldn’t rob christmas of its lustre and wonder…its a time of love and family and giving but it doesn’t have to be necessarily material things…even experiences count I would imagine, or as Levi Blackman points out…its the thought that counts.
    Explaining this to kid might not be that easy thus managing expectaions as early as possible is certainly a good idea not to mention changing their perception about the spirit of christmas and giving.

  15. These are great tips, Hank. I’ll have to say that growing up, I always loved getting gifts from Santa on Christmas morning. I would wake up extremely early and wake my parents up (sure they loved that…). But it can be tough and people go overboard on the spending.

    I think giving basic gifts and being honest about the financial situation is of the utmost importance.


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