It's a tough economy out there, even for a kid. And many parents are wondering how to broach the subject.
Should they shield their children from the hard times and spend like there's no tomorrow? Or is it better to share the reality that more families — often their own — simply can't have it all, even at Christmas? It can be a real dilemma.
"I've explained the situation, and I've also avoided it," says Mimi Chacin, a mom and business owner in Miami whose husband lost his job in advertising. The family is doing okay. And in fact, the children's cooking classes Chacin teaches have remained full so far — a sign, she says, that many parents are still willing to spend on some extras for their kids.
But in their own household, she and her husband are still having to cut back — on travel during the holidays, for instance.
"I find myself not wanting to put them under that stress, but also sitting down and explaining that things aren't easy for anybody right now," Chacin says of her sons, ages 9 and 4.
Retailers that focus on teens and children, among them Abercrombie & Fitch, American Eagle Outfitters and the Children's Place, all reported a drop in sales in November compared with a year earlier. Department stores also reported lower sales for the month, though retailer Bon-Ton Stores Inc. said children's wear was among its strongest performers.
For that reason, some retailers are stocking up this season on items for teens and children — the idea being that, if parents are going to spend money, it'll be on their kids.
J.C. Penney Co., for instance, is putting a special focus on its juniors department, says John Tighe, a company vice president who oversees that portion of the business.
"We consider the teen an influencer within the family," Tighe says, referring to market research that has shown that teens — at least in better times — have been able to persuade their parents to make purchases of all kinds, from clothing to computers and TVs.
Indeed, some businesses that provide goods and services for children report that they're doing relatively well — and some have even seen an increase in profits.
Lisa Jacobson, the chief executive of Inspirica, a tutoring company that caters to wealthier families, says she was surprised when she found that September was her best month financially in 25 years of business.
"It seemed very odd to me," she says. But when she spoke to parents, she found that, in this economy, many of them were more focused than ever on their children doing well in school.
"I really do think that, overall, it's the last thing people drop," she says of the money parents spend on their children.
Michal Ann Strahilevitz, a professor of marketing and consumer behavior at Golden Gate University in San Francisco, says that as children get older, it's important for parents to talk openly about what their families can and can't afford — and to make it a life lesson, of sorts.
"Money is not the best way to show love to children," Strahilevitz says. "So if you need to cut back on spending, think about other nonmonetary ways to make the holidays special for you and your family."
Darren Wallis, a dad in Webster Groves, Mo., says he and his wife have tried to do that with their sons, ages 10, 8 and 4, even though the family is financially stable right now.
In recent weeks, his older boys have been going through advertising circulars and making their holiday wish lists. "They do go with that everything-and-the-kitchen-sink approach," says Wallis, who works in agribusiness.
But when Wallis asked his boys to include prices and total them up, even his older son was a bit shocked that his wish list came to $904.
Wallis and his wife decided to use it as an opportunity to talk about what that money could buy — "Here's how many tanks of gas that would be. Here's how many trips to the grocery store."
"We wanted them to have some real-world practicality," Wallis says.