We know all too well how the holidays can be a stressful time for parents. Marketers ‘round the world have got your number – and your child’s too – and they are doing their level best to make it nearly impossible to stay on your budget this time of year. But, as Beth Kobliner writes in Make Your Kid a Money Genius (Even If You’re Not), “Money conversations don’t happen in a vacuum. Instead, they pop up at various times throughout the messy business of living.” The flip side? The holidays are FULL of messy, everyday teachable moments that can create the kind of learning that lasts.
So – what’s a savvy parent to do when Kris Kringle comes a-jingling for your hard earned coinage? Here at Brain Arts we decided to stop thinking of this merry time of year as our worst financial literacy nightmare and instead to think of December as a spectacular, holly jolly opportunity to introduce important money concepts. Here are our top six favorite tips to get you started:
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In our household we contribute to a “Christmas Fund” monthly so that at the end of the year, all the money we plan to spend for Christmas has been gradually and somewhat painlessly piled up in our savings account to be spent on Christmas gifts, outings, baking, and giving. If you do something similar, talk to your young person about what you’re doing. Encourage them to start their own Christmas fund, even for next year, to help the lesson hit home.
We saved up in our Christmas fund to meet a specific budgetary goal. Now we’ve got to stick to that budget. Talk to your young person about your budget and how you plan to stick to it. As you brainstorm gifts for loved ones, talk with your child about what fits in the budget (a cool 3D puzzle for a clever cousin) and what doesn’t (a four foot wide drone for the family gadget gonzo). For younger children who haven’t saved up for Christmas gifts, consider allocating a small portion of what you’ve saved up for spouse or partner gifts and let your child choose gifts within that budget for their parents. My husband and I budgeted $100 each for ourselves and we’re going to let our four-year-old son spend $10 of that on each of us. I’ll take him to choose something for my husband and my husband will take him to choose something for me. This way he gets practice working within a budget, and he gets to experience the joy of giving, not just receiving. Pro-tip – when we’re choosing gifts, we’ll make sure that he understands he’ll need to calculate the tax.
3) Impulse Buying
Are you hearing holiday tunes at the mall before your Jack-o-Lantern has even started to moulder? Is it beginning to look (and smell) a lot like Christmas? Comforting smells, nostalgic holiday music, and glittering displays are joining forces to get you to spend impulsively. Now those things can be awfully pleasant and no one’s telling you to take the magic out of the holidays, but you will be giving your child a lifelong gift if you point out the ways in which savvy marketers and merchandisers are trying to get you to buy things that aren’t on your list. Simply creating an awareness of this intention can be enough to help your child think twice before being suckered into the American holiday buying frenzy.
One year at Christmas, everyone on my list got a gift involving a spray-painted dinosaur toy. I made bookends, planters (get a tutorial for the one above at Maggie Overby Studios!), busts, ornaments, you get the idea. Why? Because we were broke and we hadn’t been saving for holiday gifts. But my dollar store dinosaur Pinterest projects actually turned out super cute and everyone was really thrilled (or at least they pretended to be). So if you’ve got a long list of giftees, like co-workers, neighbors, or a big extended family, consider creating inexpensive gifts with your child and talk to them about how this allows you to let everyone know you thought about them without necessarily spending a lot of money.
Kobliner has a great idea for teaching very small humans the concept of investing. Instead of shopping for holiday gifts and goods on Amazon or a big box store, take your child to small family businesses where “you can explain that the smaller store is owned by someone in the community, and that by shopping there, you are choosing to invest in your neighbors and, ultimately, your own town.” You can really drive this point home at the holidays because you can let them know that in supporting this small business you are helping the family who owns it to have a nice Christmas.
Tax incentives and the general spirit of giving make donating to charity a hallmark of the holiday season. And nearly every financial expert out there will tell you that giving is an important part of financial literacy. Even if you feel that you are strapped financially yourself (hello grad school debt mountain overshadowing my house), chances are if you’re reading this you have plenty (in terms of basic essentials) while others don’t have enough. This time of year it’s important to teach your young person gratitude for their plenty while making sure they participate in helping those who don’t have enough. Participate in a toy drive or volunteer at your local food bank or shelter. That being said, organizations that help those in need usually get an influx of donations and volunteers around Christmastime. While you can use holidays to powerfully illustrate the impact and importance of giving back to your children, you can also use the opportunity to spark an interest in giving back and help it last throughout the year. Committing to volunteer monthly or remembering to put aside a portion of allowance money every week for giving helps teach this lesson every week. Now the holidays are a great time to help your child learn how to become a smart and generous giver. What are some of the ways you talk to your child about money around the holidays? Anybody have some great money-saving tips to share for making the most of your holiday budget?