Not long after the presents had been unwrapped my children started plotting how they’d spend their Christmas money. They’re lucky to have a large and generous extended family, and gift cards are an inevitable (and much appreciated) part of our holiday.
My 9 year old was eager to spend his on video games. My 5-year-old was planning to add to his already large collection of LEGOs, and my 3-year-old had her heart set on all things Barbie.
While they were chatting away about which toys they were planning on buying, I realized something: that the holidays are a great time of year to teach children basic financial concepts.
After all, they’ve just experienced a season of watching their parents save, plan, and make calculated decisions. They probably overheard their dad and me disagreeing about the best ways to spend the money we’d set aside. Most importantly, though, they saw first-hand that giving can be as rewarding as receiving.
In considering this, I did a little research and came up with 4 easy ways to use the Christmas money they’d received as as way to teach my children the importance of saving. I hope they’re helpful for you, too.
Save, Spend, Donate
One way to approach it is to encourage my kids to divide their Christmas money into 3 portions: one to save, one to spend, and one to donate. I can talk with them about the fact that this is what their father and I already do with the money we earn, so why not start young?
Open a Savings Account
With a glut of holiday cash, it’s a wonderful opportunity to take your children to the bank to open a savings account. Many banks and credit unions have special savings programs for kids, as well as resources that make it easy for kids to learn about managing their money.
Allow them to Make Decisions
Kids should be allowed some freedom to make decisions about how to spend their money. As parents, it’s our job to lay the foundation and encourage them to make good choices.
Give them a Goal
It’s difficult for kids to delay gratification by not rushing out and spending their money immediately after they’ve received it. Help them understand that if they continue to save, they’ll be able to purchase something they really want later on.
Do you have any tips for teaching your children important financial concepts? Share them in the comments!
More by Mary Lauren