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The Holidays – the perfect time to teach your kids about money

With the holidays fast approaching, we are all busy making plans and creating to do lists to get ready. If you have kids using the holidays as a teachable financial moment should be on that list.  There are several opportunities to help make sure that holiday traditions don’t include financial woes.
At what age would children be able to grasp some of the financial habits associated with the holidays?
Depends on the child but certainly even kids as young as 5 can begin to understand the concepts of buying gifts that matter more than buying gifts that cost more.  And teaching them to make lists and budgets will make an impression on them and allow that to become an important part of their holiday tradition.
Why is it important for parents to use the holidays to teach smart financial habits?
Most of our holiday traditions are centered around what our families did at the holidays and this includes having poor financial habits during the holidays. Modeling the correct behavior is the best way to teach smart money management.
What is the number one habit that parents should avoid teaching their kids?
First and foremost it is doing all of their holiday shopping with credit. Funding the entire holiday season with credit is never a good idea and teaches kids that overspending is just part of making the holidays fun.
What is another holiday habit that should not be passed down to the kids?
One of the worst is to start your shopping with just a list of people to buy a gift for and not having a budget per person that you are willing to spend.  Compounding this mistake is not having any ideas for gifts prior to actually shopping.
What can kids learn from smart holiday financial habits?
That the holidays really require planning and gifting within your means.  You have to feel good about giving what you can afford to give and avoid giving more just to make an impression.
How do parents reinforce this concept with their kids?
By involving them at an early age with building shopping lists and budgets.  And when looking for gifts talk about the value the gift brings to the person receiving it not the value of the gift. For example if uncle Joe really loves chocolate covered cashews, it is alright for that to be his gift because he will really want that instead of the $125 holiday sweater that he will never wear.
Should parents talk about the mistakes they have made?
Yes, telling your kids that you overspent on the holidays and the difficulties that overspending caused you for the next 12 months is a valuable learning lesson that perhaps your kids won’t have to learn themselves. Giving personal testimony to the troubles that bad financial habits can cause is very powerful.

Posted: 11/7/2016 with 0 comments

Categories: Financial, Kids and Money, Money Matters, Spending

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