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Use the Holidays to Teach Kids About Money

With holiday ads already flooding the airwaves and ‘wish books’ of all kinds crowding the mailbox, the season 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 are conditioned from an early age to view the holiday season as 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 is definitely a money and time-save (less shopping, less wrapping), and it also helps kids focus on and understanding the concept of want vs. need. 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 be involved in buying gifts for others, which is a perfect way to introduce the concept of budgeting. First, decide on a total amount they’re allowed to spend (whether it’s 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 and some ideas for each. Spend some time together researching prices and comparison shopping online, then help kids to 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 Angle donation drives and more. Even explaining to kids the meaning and purpose of the ubiquitous Salvation Army bell-ringers is an opportunity to talk about the importance of helping others.