Christmas is the best time to teach kids about money. These tips for parents are from Karyn Hodgens, creator of KidsSave (a unique kids’ saving program that puts kids in charge of their money).
“The biggest challenge I face regarding Christmas spending and kids is sticking to my budget,” says Hodgens. “This is a recent phenomenon for me, starting when my kids entered the tween/teenage years and their ‘wants’ became more numerous and expensive. But having set the stage for this when they were younger has made it easier to say ‘no’ without feeling guilty.”
Here, Hodgens offers three tips for parents about teaching kids about money over the holiday season, plus three tips for kids who want to buy Christmas presents for grandparents, parents, friends and teachers.
For more tips for parents, read The Everything Kids’ Money Book: Earn it, Save it, and Watch It Grow!
3 Tips for Parents – Teaching Kids about Money at Christmas
1. Model good spending habits. Show your kids how you work within the limits of a financial budget: make lists, look for items on sale, etc. Be careful not to over-indulge them with all their ‘wants’, or they will grow to expect more and more. Putting them in charge of all their discretionary spending, usually in the form of an allowance, can help with this.
2. Remind your kids that no one can get everything they want. That’s just the way life is! To teach younger kids about money at Christmas, discuss that although Santa will do his best to bring many things on their list, even Santa has a limit. To teach teens about money, have them prioritize the gifts on their Christmas list. Knowing their budget will help them do this, and has the added benefit of reinforcing the idea of making and sticking to a budget.
3. Keep things in perspective at Christmas. Yes, it’s nice to receive gifts, but the focus of Christmas should be in spending time with family and friends, sharing with those less fortunate, and being thankful for all that we have.You may need to go into overdrive with this message in order to combat the commercialization of the holidays. Do this by having them choose a charity where they can donate time, gifts, or money. Matching their gift makes it more meaningful. In addition, have them come up with a list of fun, non-monetary things the family can do together over the holidays to underscore the message that it’s not necessary to spend money to have a good time. You may also want to consider volunteering at Christmas!
3 Money Tips for Kids at Christmas – Sticking to the Allowance
The rules for teaching kids how to buy gifts at Christmas are the same as the rules for spending, saving, and sticking to the holiday budget for adults. Kids just have a different budget — an allowance, probably — to work with. These three tips will help you teach your kids how to wisely spend their money while sticking to their budget…
1. Set a reasonable budget. We need to teach kids that it’s not necessary to spend lots of money to give thoughtful gifts. Discuss with friends and family a gift spending limit. Knowing that everyone is working with the same dollar amount makes giving and receiving a lot easier. And sticking to your budget is easier if you carry cash when shopping and commit to spending only that amount.
2. Buy Christmas gifts together. If you know a friend or family member would love a particular gift – such as a Kindle – that is over your spending limit, go in on it with someone else. Besides, kids love to shop together – think tweens and teens hanging out at the mall. Sharing a gift is much more fun.
3. Think about handmade gifts. Handmade gifts are often cheaper and more appreciated than store bought gifts because of the time and effort put into making the gift. They’re a favorite with grandparents and teachers. And, who knows, maybe your child will turn their gifts into a little business and sell the items for extra Christmas money at a local craft fair or online at Etsy.com. For craft ideas for young kids, check out ZiggityZoom.
If you need help managing money as an adult, read Why Are Women Bad With Money? 7 Money Mistakes Women Make.
If you have any thoughts or questions about teaching kids about money at Christmas, I welcome you below!
Karyn Hodgens has a degree in child development and a multiple subjects teaching credential. Her passion is educating parents on the importance of financial literacy for kids; her newest “parent primer” – Raised for Richness – will be released soon!