The holidays are full of chances to pass along some important life lessons—to our kids—and learning about money management is one of them. From shopping for gifts, cooking up festive meals, and giving to charity, children see and hear examples of how finances appear in everyday life. Don’t let these moments pass by, instead, make them teaching moments.
You don’t have to make talking to kids about money boring or overly complicated. The trick is to make it fun and relatable. Whether it’s working out their holiday wish list budget or explaining the significance of saving, these easy and actually useful strategies will shatter this season into bite-sized money smarts lessons.
Discuss the Value of a Dollar
The holidays are a great time to explain the cost of things. Compared to toys, comparing prices teaches your kids the real value of money, the same as explaining why a budget is necessary for gift-giving. Then, teach them to pay at the register to see the transaction in action (a small step that makes a big impression).
Encourage Them to Give Back
This is the time of giving; it is not just about presents. Help others and have your kids help pick a charity or donate toys. They learn in this lesson that money isn’t something you only spend, but money is also a way to make a positive impact.
Teach the Difference Between Wants and Needs
Sometimes, kids can get a little too caught up in holiday wish lists. Take this as a chance to talk about the distinction between what they desire and what they actually need. For example, ask them to rank first things first and talk about why some items are higher than others. This has us spend mindfully.
Introduce the Concept of Investing
You don’t need to teach kids how to invest in the stock market, but you can make the basics of how money grows over time easy to understand. You could say, for instance, If you keep some of your holiday money in a bank, it can earn interest, which means the bank gives part of its own money to add to yours. Big ideas like this become approachable through simple examples.
Set Up a Savings Challenge
If your kid hopes for an expensive gift, then use it as a goal, and start a savings challenge. Help them put apart some of their allowance or do extra chores to give something. Offering them that incentive of matching their savings as a reward could get them to continue. It will teach them that patience and effort gets paid in rewards.
Explain the Basics of Earning Money
Shoveling snow for neighbors or wrapping presents for the family may sound like holiday work, but getting children paid for this kind of holiday work can help them start to understand the idea of earning money. Motivate the kids to undertake small tasks and then tell them how they are going to spend their earnings. It also reinforces that money doesn’t automatically grow on trees, but is earned from effort.
Track Spending Together
You can show your kids how to track their holiday spending. This helps them learn to be accountable, whether in their use of a simple notebook or with an app. Understanding where their money is going will make them realize why it’s important to stick to their budget.
Highlight the Joy of Experiences
Teach kids that not everything related to money needs to be spent. Discuss how experiences, whether ice skating, baking cookies, or anything else, can generate as much happiness as getting a new toy. This will allow them to appreciate moments, an approach that will serve them for a lifetime.
Have a Holiday Budget
Get your kids involved in coming up with a holiday budget. Explain how much money they assign for gifts, decorations, and other expenses. Visuals like charts or ‘envelopes’ of cash to show where money is spent give them a concrete understanding of how the funds are distributed. This hands-on approach allows them to learn that if they plan ahead, they can avoid financial stress.
Reflect on the Season’s Lessons
After the holidays, make it a point to review what you spent and what you could have done differently. Ask your kids to be part of this conversation and tell you what they have to say. This reflection allows them to make the connection between actions and outcomes, and it sticks to the money lessons they’ve learned.
Play Money-Themed Games
Learning about money can be a game. Monopoly is a board game while many apps are virtual simulators of financial decision making. As a family game night idea, bring up lessons about saving, budgeting, etc., and what happens if you overspend. Your kids will retain what they learn when learning and fun are in sync.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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