If you want to teach your kids smart money moves, using the holidays is a great place to start and it might start with you remembering what those smart moves really should be this time of year. The holidays have so many opportunities to see and practice smart money management.
Why are the holidays such a good time to teach your children about good financial habits?
It is a good time because there are so many good habits that you actually show them and do with them. Instead of lecturing or talking in theory, you can actually have them perform theses habits in real life examples. You will be there for every step and yet they will be in complete control all the time.
What are some of the lifelong financial habits that can come from the holidays?
How can budgeting be taught to kids during the holidays?
- Comparison shopping
- Value is more important than price
- Avoiding impulse buying
Start by having them decide how much they have to spend or how much you are going to give them to buy presents. Next have them divide that money between all the people they want to purchase gifts for this holiday season. It is the simplest form of budgeting. The school Santa workshops are a great place for younger kids to learn this by the way.
Why is comparison shopping an important skill to teach?
It will help them understand how important it is to find a good deal. If you can create enthusiasm and determination to find the best deal, you will have created a habit they will carry forward for all of their purchases. And probably, even for younger kids, they are more adept at finding the good deals than you. If you make it a game, you will have a higher level of participation.
How can you help them understand value over cost with gift giving?
For younger children, having them make something for their grandparents or mom and dad is a great way to teach them that people will cherish the thought more than the cost. When they are older, help them to understand that they should buy something that matters to the person, not something that is really expensive, for example, if Uncle Bob really likes $15 t-shirts with funny sayings, then that is what they should buy and spend time finding the right one instead of buying an expensive electronic gadget.
What is the most important money habit to teach your kids during the holidays?
The biggest money habit you can instill in them is the avoidance of using the holidays to buy gifts for themselves. Talk to them about the meaning of the holidays and how buying for themselves can cause them to overspend. You might be surprised at the importance of this lesson later in life. This is one of the best ways to teach the avoidance of impulse buying.