Believe it or not, your approach to buying and giving gifts for Christmas can have a significant impact in the character development of your children and grandchildren. For wealthier families, I believe the gift giving process can affect how well the wealth transfer process in your family goes in the future. (However, the principles are applicable no matter the financial status of the family â€“ the issues are true for lower income, middle income and wealthy families).
Essentially, ife is made up of two types of events:
*Small daily life patterns and habits
*Larger decisions and events (which often have symbolic meaning).
Christmas, and all of the family traditions which accompany it, typically falls into the latter category. A question to consider is: What will be the message communicated, directly or indirectly, through this yearâ€™s gift exchange?
In a recent NPR program, it was discussed how manufacturers are creating gifts for children and young people tat are more and more expensive — $100 is baseline, with $200-$300 not being unusual (video iPodâ€™s, PS-IIIâ€™s, wiiâ€™s).
What happens in a family (or society) where 7 to 10 year old children expect a gift (or more than one) that costs $200 or more? [To put it in perspective, that equates to over 15 hours of after-tax wages for the median income family in the U.S.]
In a related commentary, Dawn Turner Trice argues that restraint is one of the best gifts parents can give their children (through modeling) today.
My concerns have to do with the messages which can be learned (or inferred) by young people when they receive excessive gifts:
Entitlement. A foundational principle of life is that there is a relationship between responsibility and privileges. When a child repeatedly receives numerous privileges (in this case, expensive gifts or exotic vacations) without paying for any of it themselves, a sense of entitlement can develop. That is, they come to believe they deserve the privilege (and they should continue to receive more and more).
Parents and grandparents want to show their love by giving gifts that their children and grandchildren will enjoy and appreciate (I donâ€™t think you want to give them a gift they will not enjoy and donâ€™t appreciate). But, just like after eating too many sweets and rich desserts at a buffet, one ceases to enjoy the delicacies â€“ so an overabundance of gifts leads to a lack of appreciation to what is received.
A focus on material possessions to bring happiness and fulfillment. In some families, the primary (or sole) focus of Christmas and family gatherings can become what cool gifts the young people will receive (ever notice how most older adults do not ask for much and are pleased with very small personal gifts?) Clearly, receiving nice gifts once or twice a year (for example, on your birthday) does not necessarily lead to a materialistic view of life. But if these are the exclusive examples of demonstrating love within a family, then material possessions can take on a great deal of meaning for individuals.
Not understanding the reality of limited resources. Another key principle in life is the understanding (and acceptance) of the fact that we all have limited resources â€“ time, energy, and finances. In wealthy families, money can appear to be unlimited to children and young people because they never see an end of it. The family can buy virtually anything they want and do anything they please. But the fact is: even wealth is limited. Ask the Vanderbilts, who went through over $100 million (in the 1870â€™s!) in two generations.
[There have been a number of solid books written on the challenges of being raised in a financially wealthy home (Gallo & Gallo, Silver Spoon Kids; Minear & Proctor, Kids Who Have Too Much; Kindlon, Too Much of a Good Thing; Hausner, Children of Paradise) that provide some helpful information on these issues.]
In the family business, the sole goal becomes â€œmaking moneyâ€. Individuals who become accustomed to a high-consuming lifestyle, need lots of money. And the family business can become the mechanism to generate the desired cash flow. The problem is â€“ the focus becomes â€œmaking moneyâ€, rather than understanding that businesses are successful when they provide quality goods and services that people desire.
Let me tell you what I believe the potential risks are to families (and family-owned businesses) if you have a pattern of giving excessive gifts (or vacations) to your children and grandchildren:
1. They will grow to not appreciate the gifts (but still expect them).
2. They will begin to seek more & more expensive gifts and/or exotic vacations to satisfy their desires.
3. They will not understand the effort and intellectual capital it took to create the wealth that bought the gifts.
4. They may begin to value you more as a reservoir of financial resources, and less as a person they want to get to know and spend time with.
5. When the time comes to distribute the familyâ€™s wealth at your death, there is a far greater likelihood of conflict, selfishness, and acrimony.
6. Their focus in business will be more on â€œmaking moneyâ€ rather than providing quality goods and services â€“ and this can lead to poor decisions and unethical practices which can kill the company.
Am I overstating the case? Am I chasing windmills? Maybe, but I donâ€™t think so.
I would suggest that you do the following this Christmas:
a) Go ahead and give a nice gift to each person. But show restraint (whatever that may look like in your situation) and only give one big gift.
b) Consider giving a smaller but more personal gift.
c) Structure some activities or discussions around other important values:
*talk about your familyâ€™s history â€“ your early life, your parentsâ€™ or grandparentsâ€™;
*do a small service project together;
*take time to share together as a family those parts of your life for which you are genuinely thankful;
*play games together; have fun; laugh together.
I hope you have a great Christmas. I plan to!
p.s. I will not be writing for the next two weeks. This coming week I will be in SF, running a number of family meetings which will take all of my time. I then will be on Christmas vacation with my family.