The holidays are filled with food, family, and gift-giving. When adults ask children what Santa is bringing them, it’s normal for children to spend much of the time thinking about gifts. They realize it’s fun both to give and to receive, but they may not realize how quickly the season’s expenses add up. This year, why not use the holidays to teach children key money management skills?
Start Early
Financially responsible adults start planning for holiday spending well in advance. This year, let your children in on your holiday budgeting. If you save change all year for holiday spending, point out what you’re doing on a regular basis and allow children to occasionally tally up what you’ve saved. If you deposit money directly from your paycheck into a savings account you use for holiday purchases, talk to your children about what you’re doing and let them monitor the account as it grows.
Allow your children to earn an allowance and encourage them to set aside a percentage for holiday gift-giving. Establish the habit of saving for major purchases early to develop a skill they’ll appreciate as adults.
For children, small amounts of money often seem like impossibly large sums. Later, when they see how long it took to amass holiday savings and how quickly funds deplete, it will help put dollars in perspective.
Develop a Game Plan
Sit down with your family and brainstorm all the expenses related to the holidays. If your children think gifts are the only expenditure, suggest things like wrapping paper, cards, the cost of shipping gifts, and the price of Thanksgiving or Christmas dinner.
List everyone you want to give a gift to, including family, friends, and co-workers. Help younger children determine an appropriate amount for everyone on their list, and allow older children to research what gift items cost.
Add up all your expenses as a family and compare it to what you have saved. Consider making a chart to post on the refrigerator that shows progress toward your goal. Often, seeing the breakdown of expenses and the total cost gives children new appreciation for good money management skills.
Identify Ways to Cut Costs
Encourage children to find ways to save money, like giving homemade gifts and handmade cards. Make a research project out of finding cookie recipes, mug mixes, or handmade ornaments, then narrowing down where to buy supplies for the best price.
Older children can calculate both the total cost and break that down into price per gift. Don’t forget to include the price of packaging in calculations. As you spend money on supplies, let children use receipts to deduct it from the total you have saved.
Buy supplies on sale, then make gifts together for family-time that encourages generosity and gives children the joy of giving something they worked to create. Give your children the gift of strong money management skills while they give others gifts they were a part of creating.
When you teach your children the value of money, you help them become financially responsible adults. They experience the joy of the season and learn monetary lessons in the process.
