“Simplicity is making the journey of this life with just baggage enough.” -Charles Dudley Warner

There was a recent “Freakonomics” podcast about the folly of prediction. Fascinating stuff — and (predictably) one of the most valuable conclusions? The experts are usually wrong.

When you study how experts make opinions and, more importantly, the characteristics of those who make GOOD predictions, what you learn is that effective forecasting requires the ability to engage in constructive self-criticism.

And that’s, incidentally, what it takes to make real and lasting changes to your financial world. You can be real dogmatic about the course you’re currently taking — and wake up five years later only to realize that maybe (just maybe) you should have switched jobs, or changed that investment strategy.

My point? Don’t be bull-headed about your finances … and maybe it’s time to make a change.

I can’t advocate, across-the-board, for a specific strategy (except of course for the big, general ones) — unless you sit down with us. Because THEN there is still time to make real changes to your 2011 tax file.

Don’t be bull-headed about making changes to your tax situation. Because I predict (ahem) that you’ll regret it come April. Call us: (818) 435-2321 or email me with any questions you might have! There are a few expiring deductions in 2011, which you can only leverage if you are willing to take action.

Now … all that aside, I’ve observed some child tantrums recently in the checkout line. And far be it from me to make specific judgments, but it HAS got me thinking about the pressure many parents face when it comes to loving and lavishing their children … and balancing it with the desire to curb consumerism in them.

So I thought I’d weigh in on a few things which might spark ideas. I know — this isn’t a normal topic for a tax professional to address. But we see it as our role to come alongside families and individuals where the rubber meets the road: how taxes and money actually affect our daily lives. I happen to think it’s part of what makes us effective … because we care about ALL of the implications for your financial decisions.

I know that every family has its own rhythm and pattern, and I’m no “parenting expert”. It’s risky for me to write about this stuff. But I hope you understand — these are ideas to spark your thinking.

“Real World” Personal Strategy

3 Gift-Giving Strategies To Limit Materialism In Children

First off, I’d like to say, again, that I’m not an expert in these matters — but I’ve had many conversations with wise clients who have shared a thing or two over the years. I have clients, with great material means, who have children that remain “unspoiled”, and don’t carry an expectant spirit.

Likewise, I have clients who have shared their struggles with us about their children always wanting MORE MORE! (these are brave and wonderful clients to share such private details), and this, even, when some of these families don’t have large incomes.

And then there are the holidays — coming faster than we all think.

So how do we hold back the flood of consumerism, and teach our children the true meaning of gifts, giving and the upcoming holiday season? Well, some of my wiser clients might say …

1) Explicitly Limit The Number Of Gifts Given

Parents often tend to go overboard buying presents for their little ones around birthdays and holidays — after all, it often feels like an overflow of love AND children sure do love it.

But I know families who have always put a stated limit on Christmas and birthday presents — and yet their children don’t seem to act like they feel deprived. Christians can link Christmas gift-giving to the three gifts of the magi; others can find different spiritual reasons to not simply pour a truckload of gifts on their children. The key seems to be in creating a happy atmosphere around it, and remaining consistent.

2) Have Your Children Buy Their Friends Gifts

Why not let your kids experience what it feels like to sacrifice and give? After all, we’d all want to give ALL of our friends a gift, but the truth of the matter is that we simply cannot buy a gift for everyone on our list. We have finite resources and have to allocate them accordingly. There is a line that we all have to draw in the sand for who will get gifts and who will get a card.

Giving your children a certain dollar amount to spend on gifts, or simply making them pay for their friends’ gifts out of their own pocket, will teach them about making the hard choices of whom to give to, and how much, within their very limited resources.

And, of course, this assumes that they ARE giving gifts! If not, that’s a great place to start.

3) Share Pertinent Financial Details

Children should be protected from adult concerns. But  that doesn’t mean that they should be blissfully ignorant about how money works. In fact, we owe it to our children to properly explain where the family’s money comes from, how it gets into the bank account, and how expenses and budgets work. With a little explanation about how your family’s budget is structured, you may be able to hold back the tide of consumerism.

Again, they don’t need to feel a pinch — but they SHOULD know that gifts and items have a monetary value, and don’t just get plucked from the shelves without cost.

These are just ideas to start with. It’s extremely hard to curb the allure of consumerism in our culture. But in my opinion, it’s a fight that every parent should consider waging in today’s society of overspending and consumer debt.

Again, every family has their own approach … but I do hope that you’ve thought yours through.

To your family’s financial health!