How To Teach Your Children About Managing Money Through Holiday Shopping
The holidays are an excellent time to teach children a variety of values, such as giving to others, appreciating what you have, and learning how to budget and manage money. Here, experts weigh in on all the lessons that you can impart to your kids by simply taking them holiday shopping:
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Teach Budgeting
Holiday shopping is an excellent time to teach children about budgeting, says Tyler Martin, founder and certified business coach at ThinkTyler. “Give your child a certain amount of money to spend on gifts for others, with the caveat that he sit down with you to create a budget. Your child will learn the value of making sensible financial decisions.”
In this process, Martin explains, your child may realize that some of their gift ideas don’t fit within the budget.
“Younger children may have an easier time grasping this notion if the money is given to them in cash. Assist them with dividing money into piles so they can see how their money will be spent.”
Additionally, you may be able to offer the incentive to earn more money for holiday shopping through chores or duties.
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Describe Wants Versus Needs
The holidays are a great time to show kids the difference between things they want and things they need, says Pamela Yellen, a financial investigator, founder of Bank on Yourself, and author of two New York Times bestselling books.
“Those slick Madison Avenue types would have us believe that we need lots of things, from the latest techno-gadget to that trendy new shoe. They tell us that we’re not sexy/successful/cool without what they’re selling…What do we really need? Stop and think about it and get clarity for yourself. And if you have children, teaching them the difference between needs and wants will empower them for life.”
She reminds parents that it is important to help children negotiate the messages they receive about money. “Every moment of their waking day our children are bombarded with messages and pressure from peers urging consumption and instant gratification,” Pamela says. “Moreover, technology has elevated buying-on-a-whim to an art form.”
The teen years, especially, she says, are an excellent time to teach kids about saving, spending, earning and investing habits.
Do a Family Savings Challenge
With the holidays on the horizon, families have time to begin teaching their children about saving in advance of a purchase. Steffa Mantilla, a certified financial education instructor and CEO/founder of Money Tamer recommends, “A few months before [the holidays] set up a family savings challenge. Have each family member set a savings goal and divide it by how many months there are until [the holidays]. That way, your child will see how to save up and budget for future gift spending so they don’t get into the cycle of holiday debt.”
Teach Larger Economic Principles
There’s so much more for kids to learn about money besides just income and expenses, says Monica Eaton-Cardone, co-founder and COO of Chargebacks911, a FinTech company.
“The holidays are a great time to teach children about the concept of value, demand and worth. Sometimes, adults forget how utterly foreign the ideas of money, capitalism and pricing are to adolescents. Because it’s not intuitive, children must be taught: It’s not enough just to covet something–you must also have the skills to analyze whether or not the price-point makes sense for your specific budget. If it doesn’t, then walk away. And really, that’s where it should begin with a kid: Give them a fixed budget and help them learn how to assess value and worth.”
Teach Safe Shopping
Eaton-Cardone also urges parents to teach children how to shop carefully online. “Because so much of today’s holiday shopping–especially in a post-COVID economy–takes place online, you also need to teach your children how to shop safely and avoid fraud-threats. It’s great to have a budget and it’s important to learn how to comparison-shop, but if you lose all your money to hackers, your Christmas will be ruined.”
Teach Them About Giving to Charity
The holidays are also an excellent time to remind children that not everyone is in the same financial boat and that those with enough can help out those with less, Mantilla says. “It’s important to not forget about giving since holidays are mainly about appreciating others. Around 10% of your savings goal could be allocated towards giving to charities.”
Empower Kids To Make Their Own Choices
Parents often believe that the only way to ensure kids develop good money skills is to tightly manage their children’s money opportunities. However, according to Elizabeth Westendorf, certified financial planner at Fearless Finance, a little empowerment goes a long way.
“One of the best things parents can do to teach kids and teens about money during the holiday season is to have them make their own choices. Give them a set amount to spend–this has to cover gifts to any friends, relatives, siblings and parents. Then, they have the opportunity to prioritize how they use that money. There’s more ownership for them. Maybe they want to give gifts to a lot of different people–that might require getting creative to make the money go farther. Or they might realize that the thoughtful gift that cost less was more of a hit than the expensive one they bought last-minute.”
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This article originally appeared on GOBankingRates.com: How To Teach Your Children About Managing Money Through Holiday Shopping
