Use the Holidays to Teach Kids About Money
With holiday ads already flooding the airwaves the seasonal madness has arrived. Whether you’re a can’t-get-enough-of-Christmas person or someone who’s just shy of bah-humbugging your way through the season, you might be surprised to learn that the holidays are actually a perfect time to teach kids about money and personal finances.
The season is loaded with teachable moments that can be used to help kids understand the concept of wants vs. needs, how to budget, the importance of giving back to the community and more. Here are some ideas for using the holidays to teach kids about money.
The 4-Gift Rule
Kids understand from an early age that the holiday season is a time of excess. The idea that ‘more is better’ when it comes to gifts is pervasive. If you’d like to curb that kid consumerism and keep gift-giving expectations reasonable, try the 4-Gift Rule, which gives kids the opportunity to ask for gifts in four specific categories:
- Something I Want
- Something I Need
- Something to Wear
- Something to Read
Limiting gifts to four categories definitely saves money and time. And it also helps kids focus on and understand the concept of wants vs. needs. They can still create a wish list with multiple items in each category, but with the understanding they will receive one thing per category, rather than all of them.
Budgeting for Gifts
Kids love to buy gifts for others, which is a perfect way to introduce the concept of budgeting. First, decide on a total amount to spend. It can be money they’ve saved, money you give them or both. Then sit down and write out a list of the people they need to buy gifts for. Spend some time together researching prices and comparison shopping online. Then help kids make the best purchasing decisions based on the budget.
‘Tis Better to Give…
Why not use the holiday season to teach kids about helping those in need and becoming involved in the community? It helps to take the focus off wanting and puts it on giving instead. There are always plenty of opportunities for giving back this time of year, including: faith-based efforts, adopt-a-family programs, Christmas Angel donation drives and more. Even explaining to kids the meaning and purpose of the Salvation Army bell-ringers is an opportunity to talk about the importance of helping others.