Festive financial tips for kids
4 min | 12 December 2022
It can be all too easy for parents to get caught up in a frantic festive spending spree. But it’s actually a perfect time of year to lead by example and share some valuable ideas about managing money.
One of the best things about the festive season is the joy it brings to the kids in our lives. Yet it can be one of the most stressful periods of the year for parents who want to treat them without overspending. With the holidays on the horizon, it could be an ideal time to refocus and teach the younger generation some important money lessons that will help them on their way to a more secure financial future.
Make and stick to a budget
We’ve probably all been guilty of splurging too much during the holidays at some point, but the last thing you probably want to do is get into debt or struggle to pay the bills next month. To help manage costs, set a budget for presents. For older kids, sit down with them and explain how much you can afford this year. For younger kids, you might want to take a slightly different approach – instead tell them how many items they’re allowed on their list. You could also ask them to help you make a festive food shopping list within a certain budget.
The importance of delayed gratification
If your kids ask for a gift that’s beyond your budget, it’s a good time to introduce the idea of delayed gratification and saving. Suggest that rather than getting the latest games console now, they could save their pocket money and put it towards the console – or an even better one – later on. If you haven’t done so already, you could open them a savings account and encourage them to put money away each week as part of their new year’s resolutions.
Why it can be better to give rather than receive
The holidays are traditionally all about giving rather than receiving, but the meaning behind this can sometimes be lost among a deluge of presents. You can shift this way of thinking by encouraging your kids to pick a charity you can donate to on their behalf, or suggest they save a portion of their pocket money for future donations. As a family, you could also consider volunteering during the festive season so that your kids can appreciate how giving your time can be just as valuable as giving money.
The difference between wants and needs
In the run-up to the festive season, kids naturally may say they 'need' the latest toy. If this sounds familiar, you could turn it into a chance to help them understand the difference between their needs and wants. How receiving that exact toy might not be the deal-breaker they think it is in the grand scheme of things (while still showing them that you understand their excitement about it, because we were all kids once). Showing them how to distinguish between these two things early on could help them make more responsible financial decisions later in life.
Experiences can be more meaningful than things
With merchandise appearing in the shops and ads popping up on the TV months before the holidays start, it’s easy to be swept away by the consumerism surrounding this time of year. So it’s a good time as a family to think about ways to create moments you will cherish – like spending time with loved ones, days out as a family or crafting gifts together. This could then help your children appreciate that gift-giving and receiving aren’t necessarily all about spending lots of money. It could also help them appreciate the moment when the time does come to open those presents.
The festive season can be overwhelming for parents, but it’s a great opportunity to help your kids learn about money. By trying to make a few responsible financial decisions and showing them an alternative way of thinking about money and what to spend it on during the holidays, you could set them up for a brighter financial future.