Monkey See, Monkey Do

Four Simple Ways to Teach Kids About Money During the Holidays

by April Leiffer Henry

Financial Frequency. myFamily

November 15, 2019 .3 min read

Helping children understand how money works is an ongoing conversation that will likely start when they're toddlers and continue until they're teenagers (and beyond).

When youngsters are about 3 years old, they can understand counting and can begin to comprehend the most basic concepts of earning, saving, spending, and giving. As children grow, you can explain products versus services, needs versus wants, and short-term versus long-term goals. Tweens and teens can digest more advanced concepts like credit, interest, debt, budgeting, and wealth.

During the holiday season, you can use this wonderful time to put a new twist on how you teach your kids about finances. That's because typical holiday activities like party-going, gift-giving, and donating often require money.

Here are 4 simple ways to teach your kids about money during the holidays.

Budget Together

Talk with your children and ask them if they'd like to purchase gifts for others. If they are old enough to earn an allowance from doing chores around the house, they can use their own money. Perhaps they'd like to buy for parents, grandparents, siblings, or other family members. They might even think of friends, neighbors, or teachers they want to bless. Help them create a list of who they're buying for and how much they can spend on each person.

In addition, invite your kids to sit down with you as you map out your holiday expenses. Depending on their ages, they can write down names, brainstorm gift ideas, estimate costs, fill in numbers, and add and subtract dollar figures.

Finally, put your planning into action when you shop. Whether you're browsing online or in a store, have your lists and estimates handy. Remind your children how much money they have allotted and help them stay on track.

Be Intentional with Activities

Holiday parties and performances can overrun the season if you let them. While it's wonderful to schedule fun family activities, it's important to talk to children about the related costs.

For example, a holiday-themed theater performance means buying tickets and possibly purchasing other items, like dress clothes to wear to the venue and drinks or snacks at intermission. Holiday train rides are fun for parents and children, but they can come with a hefty price tag. Even simple holiday parties often involve gift exchanges or the expectation to contribute food and drinks.

It's not to say that families shouldn't participate in these activities. Definitely choose what fits in your budget! Given all the choices, you will likely have to explain to your children why they might not be able to attend every event.

Create Opportunities for Giving

If your church participates in the Samaritan's Purse Operation Christmas Child program, you and your family can pack toiletries, crafts, and toys in a shoebox — or shoeboxes, depending on your budget — that will be delivered to a lucky child somewhere in the world.

Another popular holiday giving opportunity is taking a tag off a giving tree and buying clothes and toys for a local child. Or maybe you can pack stockings for homeless people in your area.

There are many chances for giving during the holidays, so seek out ways your children can help others. They should understand that even giving to charities — whether donating money or materials — requires money and needs to be part of a holiday budget.

Continue Educating

Have you heard of the "four-gift rule?" It's a system that helps many families rein in the excess of the holiday season. Children know they will receive one gift from each of the following four categories: Something I want, something I need, something to wear, and something to read.

This rule assists with teaching wants versus needs, but it also goes a long way in instilling a love for books and reading.

There are some wonderful children's and young adult books that teach financial concepts. For example, Cloverleaf Books offers the "Money Basics" set, which is appropriate for children in pre-kindergarten through third grade. It includes six titles: Brody Borrows Money, Ella Earns Her Own Money, Gabriel Gets a Great Deal, Kyle Keeps Track of Cash, Lily Learns About Wants and Needs, and Shanti Saves Her Money.

For older children, consider resources like The Kids' Money Book: Earning, Saving, Spending, Investing, Donating and Finance 101 for Kids: Money Lessons Children Cannot Afford to Miss. These are great options to read aloud to your youngsters, but your kids will want to hang onto them and refer to the information as they grow in their financial knowledge.