Teach Your Little One about Money at the Holidays
The holiday season is an exhilarating time for children, especially those between 5 and 9 years old. While still young enough to believe in all the magical moments, they’re old enough to understand the joy and satisfaction of receiving gifts and giving gifts to others.
That’s also what makes the holidays a great time to teach this age group about budgeting money. After all, the 5-to-9 set is starting to understand much more about the world around them and how it works. Experts say that many kids can recognize basic concepts about money as young as 6 years old as they begin to utilize math, reason and choice in their daily lives.
And although the holiday season always seems to be a little hectic, it can be an excellent opportunity to impart lifelong lessons about saving money and spending it mindfully on friends and family. To get you started, we consulted the experts and came up with these tips:
- Create a Family Savings Jar. This works best when done as early in the year as possible, but anytime is a good time to save! Make it a joint venture, with everyone chipping in to decorate a large jar or container for spare change or intentional donations from piggy banks or grown-up wallets. Designate the money only for holiday spending. Whether you set a specific monetary goal or not — it’s up to you — having the jar in a visible location can encourage the entire family to develop the habit of saving.
- Make a List. Have your child sit down and write a list of all the family members and friends they want to buy gifts for. (And be prepared — this list might include everyone from grandparents to classroom teachers and neighborhood pets!)
- Set a Budget. Talk with your child about how much money they have and how much you might be able to add to their total. Then discuss how much they want and need to spend on each person on their list. If possible, let them do the math to figure it out, and stress that they don’t have to spend the same amount on every person.
- Brainstorm Gift Ideas. Hold a family meeting and share ideas about what to buy for the people on your family’s holiday gift list. Remind your child that gift giving isn’t simply about spending money, but finding a present that person will enjoy and find meaningful. Set aside time for this task and help your child be thoughtful about each recipient.
- Comparison Shop. Teach your child the value of maximizing a dollar by comparing prices at stores in person and online. Incorporate coupons to help them understand discounts or schedule specific sale days on the calendar. One fun budgeting lesson is to give your child a $20 bill and take them to the local dollar store to pick out gifts. They learn about choice and prioritizing and keeping track of their spending.
- Get Creative When Money’s Tight. During this time of persistent inflation, many families are feeling the squeeze on their holiday budgets. Be honest with your children, explaining that sometimes prices increase to the point where families have to cut certain items from the list. And don’t discount the value of budget-friendly options, such as homemade cookies and candies or coupons for household chores.