Now that Thanksgiving is over, we’re officially in the holiday gift buying season. December can be quite expensive, especially if you have children with long lists for Santa. But the holidays also offer a great opportunity to teach your children about smart money management. Here are a few tips for showing your kids how to buy gifts on a budget, and how to create their own gift lists that won’t put a hole in Santa’s wallet.
Teach How to Set a Budget for Gifts
Young kids and even teenagers don’t typically understand how much things cost or how expensive purchases can affect their family’s budget. To help them get a better idea about managing money for the upcoming holidays, first show them how to set gift limits. Give everyone in the family a specific dollar ceiling for their gift list, so that everything they put on it can’t total more than the limit. This way your children must decide if they want their budgeted amount to go toward one big gift, or if they want many gifts for much smaller amounts. You can take that a step further and put a price limit on individual gifts.
By making these budget decisions they’ll learn a valuable financial lesson, and hopefully better understand how you go about making money decisions on a daily basis.
Teach How to Shop Smart
Buying gifts for others is another important financial process you should share with your kids. During the holidays, kids tend to be overzealous when it comes to spending on gifts for you, their friends, or other family members because they don’t quite grasp the responsibility and reality of a budget. Try giving your children a “Gifts to Buy” budget with a set spending limit. Start by making a list of everyone the family can afford to buy gifts for, then set a total dollar amount for all the gifts. Remember to talk to your children about additional costs, such as sales tax, the cost of shipping when buying gifts online and the cost of wrapping paper. These miscellaneous expenses should be considered when they are doing budgets.
You can also teach your kids how to search for the best deals. Clip coupons, check store apps for specials, search store flyers and browse retailer websites for price differences with them.
Teach the Value of Homemade Gifts
It’s important to teach your kids that gifts don’t always need to be bought. If their budget is tight, let them know they can consider creating a present for someone. From a photo collage to a hand-written story, to a handcrafted piece of pottery, kids can make something special without spending much or any money. Homemade gifts like these often mean more to the recipient because they are personal, and they encourage creativity.
Teach the Value of Giving Back
Along with budgeting for the holidays, another lesson you may wish to impart to your children is that giving to those less fortunate can be more rewarding than receiving gifts for the holidays. You can teach them the value of giving back by having your children budget for one donation instead of a present on their gift lists. Ask them to choose a charity based on their interests. For example, if your daughter loves animals, a local animal shelter would be a good place to give. Another great way to instill the holiday spirit in your kids year-round is to volunteer with them at a charitable organization in your area during school breaks. They will see what how they can make a difference in other people’s lives, as well as the value of money.