Christmas Gift Giving Can Be Character Training

December 12, 2006 10:36 am Published by

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 – 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 year’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 iPod’s, PS-III’s, wii’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:

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 don’t think you want to give them a gift they will not enjoy and don’t appreciate). But, just like after eating too many sweets and rich desserts at a buffet, one ceases to enjoy the delicacies – 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 – 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 1870’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 “making money”. 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 – the focus becomes “making money”, 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 family’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 “making money” rather than providing quality goods and services – 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 don’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 family’s history – your early life, your parents’ or grandparents’;

*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.


Published by
December 12, 2006 10:36 am


  • Thanks for this post. As someone who has worked in family business with my in-laws and now my Dad’s business, I always glean much from your posts.

    I always worry about over-giving with my own children. Is it enough for me to practice restraint and do a, b, and c even if afterward we go to Grandma’s and it’s the complete opposite?

    I wonder if you think it is possible to reverse the damage done to those children/adults who “learn” to expect large gifts, or many gifts? Any ideas for how to break this family cycle/tradition without breaking too many hearts?


  • Paul says:

    Melanie, you raise a great point, and a common issue — you can control what you do but you can’t control what others do (especially grandparents!) One of the nice aspects of grandparent/grandchild relationships is that children learn that it is a different “special” kind of relationship — and they usually don’t generalize their expectations to others. As I have heard many grandparents say, “Don’t deprive me the joy of giving to my grandchildren.” Typically, I wouldn’t try to change your folks’ (or your husband’s parents’) pattern of giving — it typically creates conflict, heartache, and doesn’t work. Rather, I would use it as a “talking point” with your kids about how generous their grandparents are, that most people don’t receive these types (or amounts) of gifts, and that they shouldn’t necessarily expect that this pattern will continue forever. I’m open to your thoughts on this. Paul

  • Wonderful, I feel relief!

    It is so silly how worked up and willing to do anything I can get when it comes to the character development of my children. I usually relish “talking points” but for some reason I’ve been too emotionally involved to see this 10 yr situation rationally.

    I think part of it comes from the mixed messages I received as a child and some of the issues I still deal with as a receiving adult. I’m going to chew on them a bit more for myself and consider my own fear of over-abundance. I’m surrounded by generous family and I am painfully aware of how blessed I am. Though I know restraint is practiced, I also know I still receive “not-normal” gifts.

    (I wonder if you have ever written or spoken to the guilt or fear that goes along with over-abundance? Especially if you are the third generation and really didn’t “do” anything to deserve a great job with financial security.)

    I can’t wait to share your words with my husband, our family and our children. Seriously, this new perspective will probably really help free us all at Christmas. Thanks so much, again!

  • Paul says:

    Melanie, glad that was helpful. I have not written on the topic of guilt but there is a great website,, with a number of resources. I would encourage you to start with the book, The Legacy of Inherited Wealth, by Barbara Blouin. It is a series of interviews with 14 inheritors. I found it to be quite insightful. I know the author and she is very helpful. There are other good books available on their website, as well.

    Another great book is The Dark Side of Wealth by Thayer Willis.  This is probably the best book in the area I have read.


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