As soon as the fall decorations start going up, a small thought in the back of my head starts planning for the holidays. I think of decorations, music, food, the smells and of course, presents!
Finances tend to be a “grown up” thing, and often kids are left out of the loop. We’ll shop without them (usually for obvious reasons) and avoid discussing the costs with them thinking that they don’t need to know or it’s none of the business.
But really, getting ready for the holiday season is a fantastic opportunity to teach kids about money and generosity!
In addition to a “grown up” thing, finances are also a personal thing. Many parents don’t think they need to teach their kids about money. Others just don’t know how! And I get that – it can be tricky to explain adult concepts in ways that kids would understand.
But if you don’t teach them, who will? And one of the best ways to teach your kids about money is to set the example yourself.
Opportunities to teach finances to our kids are all around us, and the holiday season is a prime example. I’d like to share just a few of the most common scenarios that almost every family encounters this time of year, and how you can turn them into opportunities to teach your kids about money.
Teaching Kids About Money with the Holidays
The Official Game Plan
First, as as family, decide how much you are spending on Christmas. Some things to include in your discussion:
- gifts
- supplies for making gifts
- cards (with postage)
- family Christmas letters
- gift wrappings
- parties
- even the cost of bringing traditional family meals to gatherings
- How much are you spending on immediate family? Extended family? Friends? Co-workers?
I highly recommend paying for Christmas in cash so you’re not bothered by paying for presents long after the holidays have ended. If you break your larger total into three segments, you can start now and set aside one portion for each of the three months still left before Christmas!
Also be sure to set a monetary limit to how much you will spend on your own immediate family or choose how many presents each person will receive.
How to Involve the Kids: Have your children listen in on some of the spouse-to-spouse money talks to model the process of how setting a budget works with a real life scenario. They need to learn that money is finite and how important it is to decide where your money will go.
It is so easy to go overboard on buying presents for the ones you love, but limiting the gifts your own family receives will allow you to have more room to be generous with others.
How to Involve the Kids: Have your kids write out a list of everyone you want to give a gift to and the amount you want to spend per person. Now, you will need to stick to these amounts and not buy expensive gifts out of obligation or wanting to impress people. In order to become generous adults, kids need to see generosity in action!
Making Homemade Gifts
One way we’re able to pay for my husband’s college tuition with cash is by making gifts, and this is something the kids can easily join in on.
Set up a Christmas room, if you have the space, and start making gifts a little bit each week. Picture frames, ornaments, coasters – the possibilities are endless!
You can even let kids help you with cards by choosing blank cards with envelopes and having the kids decorate with glitter, stickers and lovely drawings. Want to include pictures? Print snapshots of your family to stick inside. This is a great way to offset the cost of traditional Christmas cards.
Or you can make foodie gifts! One year my family made homemade salsa and homemade tortillas to give out. Everyone had different duties, chopping tomatoes, cilantro and peppers. We laughed and joked as we made a fun memory along the way!
Cookies or cookie mix in a jar work well as do spice rubs or trail mixes. There’s lots of great gift ideas for $1 or less per person here as well.
How to Involve the Kids: Brainstorm with your kids about what gifts you want to make as a family and have them count up how many gifts of each kind you will be making. Have them write out a list of the needed supplies and figure out the quantities.
Stocking up and buying supplies while they’re on sale are great ways to stretch your dollars when money is crazy tight and are good lessons to learn early on. Keep an eye out when you are out and about, stock up on supplies when they are on sale.
What the Kids Learn: Mass producing gifts will cut the costs per person down significantly and your kids will learn the joy in giving something they helped create. Delivering gifts will connect the ideas that giving is about blessing another person and you need to receive a gift with gratitude.
Whatever you make together, be sure to play Christmas music and make hot cocoa as you work together as a family making presents. Enjoy each other’s company by making jokes, telling stories, and laughing. Make these moments memories!
Savvy Shopping
Instead of keeping them in the dark, tell your children the amount of money you are planning to spend on each person and take them shopping with you. Do a little bit of shopping each week to make it easier on the budget and on you.
How to Involve the Kids: Make a game with your children to see if you can find the items on sale and spend less than the set amount for the gifts.While you are at the store, you can teach them to compare prices to find the better deal per unit price. Pay with cash and let your children count out the money and coupons to the clerk.
What the Kids Learn: Savvy shopping skills and comparing prices will help your children learn how to spend wisely throughout their lifetime.
Tracking Your Spending
You can get your older kids involved with helping you stick to the budget by tracking how much you spend and tallying up the running total. (Plus it will help their math skills!)
Also, with older children, you can give them the responsibility (with guidance if needed) to take a certain amount of cash and use it to purchase gifts for 1-2 people on their own.
What the Kids Learn: This will be a great lesson in budgeting for multiple items, looking at the prices, tracking your spending, all while dealing with a limited amount of money.
Saving Money in the End
As you finish shopping, talk about how much you were able to save and put the extra money in a glass jar at home. Explain how decisions they helped make is what allowed the family to save that money.
If you have a substantial amount left over once you have finished all your shopping, consider buying a gift for someone in need or do something fun and memorable as a family.
What the Kids Learn: The money jar of savings relays the power of making your savings goals visual. Being able to bless someone else with the money you’ve saved shows generosity and giving in action.
Give to Tangible Needs
Money lessons are not just about following a plan and spending wisely. You can also use the season to teach the importance about giving, which is another essential money skill.
Share with your children how some people are in a situation where they don’t have the money for Christmas or even some of their regular needs. Stress how important it is to give to others, if you are in the position to do so.
There are organizations such as Operation Christmas Child or Angel Tree where you can pick a child with a need and then purchase a gift for that child. Allow your children to pick a child to give a gift to and then go shopping.
How to Involve the Kids: Have your kids choose a special gift and pay for it, so they have ownership and can delight in giving. If possible, take the time to be involved in delivering the gifts so your children can see the grateful reaction of the recipients.
What the Kids Learn: Giving to others in need will make your children compassionate and grateful.
Christmas is more than just presents if we take the time to make it so. There are so many ways to enjoy the holidays without money, but it’s also a prime opportunity to bring the kids in on important financial lessons!
Do you typically involve the kids with Christmas finances? Can you share examples of how you’ve done this?
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Needless to say that I love the topic. If kids don’t know the value of money, it only makes adulthood and its responsibilities way too painful.
Excellent post, Charissa!
Thank you Debbie. Great point about how painful it is to figure out money and responsibilities as an adult.
Thank you Mary! So much is caught by example especially when you are teaching about money.
Amy, you are doing great with even covering money topics with your daughter! Making your money talks something fun and relate-able about a real life experience along with repetition will help cement the ideas for your daughter over time. Another great way is to remember you are constantly modeling money habits, which she will catch more than you think. Keep up the good work.