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A Lesson in Holiday Frugality

by Magical Credit

Are you familiar with Aesop’s fable The Ant and the Grasshopper?

While not a holiday tale per say, it’s a poignant lesson in personal finance.

holiday-spending-personal-finance-short-term-loans

If you’re unaware of the story, it involves a hard-working ant that stores supplies all summer in anticipation of the winter ahead, while the grasshopper enjoys the warm days, ignoring the times of need on the horizon.

When winter comes, the ant is cozy and well-stocked, while the grasshopper is cold and starving.

The analogy to wealth is apparent. Money-wise people with the high wealth tend to spend the lowest percentage of their savings in retirement, suggesting their innate, ant-like frugality is the reason for their fortune, not their career or good luck.

The ant’s habit of thrift is a lifestyle maintained, even in retirement (or come wintertime).

So, what’s the lesson here? Well, it’s hard to turn an ant into a grasshopper, but you can turn a grasshopper into an ant.

Still confused? Let’s apply this concept of frugality towards the upcoming holidays, and how we can educate the biggest buyers (kids) of the spending season.

Wants vs. Needs

We can’t help but think of this fable when kids create Christmas lists five pages long.

If you look closely, you’ll see the budding habits of a grasshopper – lavish toys they didn’t know they wanted until they were swarmed with TV ads, new and ‘improved’ versions of gadgets that they already own, something the coolest kid in school has, and so on.

You’ll see a large list of ‘wants’, but you’ll be lucky to find a ‘need’. Even the wants may not be so desired – they could be giving into the power of suggestion.

The holidays are the perfect time to educate your kids about their path to grasshopper-like consumption, and how they can be saved by a frugal ant mindset.

The Four-Gift Rule

One idea suggested to us, in an attempt to disrupt grasshopper-esque consumerism, was to offer your kids one big, impressive gift for Christmas.

It’ll end up costing you more, it’s true, but your kids will learn about trade-offs, and investing in something that will hold its value over a few years.

In theory this could work, but your kids may bug you for a few more things on the list anyway. Plus, you may find yourself caught between being a parent steadfast on creating ant-like restraint for your kids, and being a parent that wants their kid to have a memorable Christmas.

What you can try is the four-gift rule. Tell your kids they’ll get four kinds of gifts for Christmas:

  • Something they want.
  • Something they need.
  • Something to wear.
  • Something to read.

This is a win-win for parent and excited children alike. The kids still get the freedom to choose the gifts they want (list-making is also fun for some). You, the parent, can take solace in a life lesson well taught: your kids will prioritize what they truly desire, make trade-offs, and distinguish wants from needs.

As a bonus, you’ll slowly instill the realization that clothes and books are legitimate gifts, too.

It’s not a full, ant-approved solution to reckless holiday spending, but it veers off the path of the grasshopper!


Have you been spending like a grasshopper, and can’t afford life necessities this month?

Magical Credit offers short term loans to low income applicants that may have poor credit. They can get you back on track, as you work like a smart, frugal ant to improve your credit score and personal wealth.

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NOTE: You can pay off your loan at any time with no penalty. You will only pay interest up to the date you borrow it.

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