How to talk to kids about money this holiday season
- The holidays are a great time to teach your kids about the impact of saving and budgeting.
- The key when talking about budgeting is to not only explain what happens when you stay on budget but also what happens when you don’t.
- Use a simple shopping trip to teach your kids basic maths
We aren’t born knowing about the importance of money and budgeting. Teaching kids about money is important from a very young age.
Before you run off to the store to buy grandpa that new travel pillow he’s been talking about, think about using this time to teach your kids about money. The holidays are a great time to teach your kids about the impact of saving and budgeting.
Here are a few quick ways to incorporate money lessons into your holiday shopping.
Explain the importance of a budget
According to the National Retail Federation, Americans spent around $700 billion on holiday shopping in 2018. With so much money going in and out during the holidays, use days off as an opportunity to teach your kids about the importance of a budget.
As you start to make your holiday shopping list, talk to your kids about who you’d like to shop for. You can explain that you’d only like to spend a certain amount of money in total, and everyone’s gift will have to fit into that budget.
The key when talking about budgeting is to not only explain what happens when you stay on budget but also what happens when you don’t. Staying within your budget is pretty easy to understand for a kid. If you take a child shopping for a couple of gifts with cash, they can easily understand when the money has gone.
Now is your chance to explain what happens if you take cash from somewhere else because you went over budget. You can tell them that you’ll have to take some money out of the budget for vacations, soccer class, or fundamentals like food and electricity.
Make a list of wants and needs
To a young child, everything they want will probably feel like a need. You can use the holidays as a time to explain that most holiday gifts aren’t something we need. In the case of an ugly necktie, this is especially true.
Have your children make a list of everything they want for the holidays or everything they want to give to other people. Next, have them write out the things they need. You can guide them along by explaining how your family needs groceries or gas for the car. Once they see all of the needs you have, this can help them gain some perspective.
To a young child, everything they want will probably feel like a need.
In addition to teaching kids about money, this is also a great time to tell children about how millions of people across the world aren’t able to get their basic needs met. Challenge your kiddo to remove a want from their list and use the money to meet the needs of someone else.
Use shopping as a teachable moment
While it is easy to get caught up on the commercialism of the holidays, try and take some time to teach your children about how the holidays can be about something else.
A simple shopping trip can be a great time to teach some basic math and money lessons. While at the store, have your child count the cash, read the numbers on a price tag, or do simple math problems.
When your child receives new gifts for Christmas, try the one toy in and one toy out rule. For every toy your child receives, they can pick an old toy to donate to a child in need. This helps reduce the clutter in your house while also teaching your kids about generosity and empathy.
Your little one may surprise you with how generous their heart can be.
A deeper dive — Related reading from the 101:
- Money tips for kids: Easy ways to show how money works | Parenting 101
With these money tips, kids will respect what they have and will be better prepared for their financial responsibilities as an adult.
- Yes, you CAN have a great kids birthday party on a budget | Parenting 101
Believe it or not, great kids’ birthday parties don’t have to break the bank.