They see you when you’re sleeping; they know when you’re awake. They know when you’re scrambling to shop, cook, and decorate. We’re not talking about Santa; we’re talking about your children. That little audience sees all the good and bad that comes with holiday prepping, and while we’ve discussed ways to teach kids about finances in the past, the holidays offer a unique opportunity to take it a step further. Here’s a four-step approach for educating your kids on healthy holiday spending.
Be open and honest about your finances. This time of year can encourage the comparison game. Explain your budget and holiday spending strategy to your children. That way there won’t be false expectations, and you and your family can enjoy the holidays without the stress of spending a ton of money.
Create a holiday budget and let your children be a part of those discussions. Make a list of everything you plan on purchasing, including gifts, wrapping paper, cards, postage, baking and party supplies, etc. Include price ranges so you can create a budget. Explain to your child that you cannot go over that dollar amount, and encourage them to follow the same process with their holiday expenses.
Teach bargain hunting and coupon cutting. When you’re shopping online, check different websites and have your child record the different prices for comparison. Scour your emails for any sales or online coupons you may have received. If you’re in the store, look at different brands to see where you can save, and go “old school” by grabbing your scissors and checking the local paper for coupons. You can even offer an incentive: if you all go under budget, you could use that extra money for a family-fun night.
Pay in cash. Using a card as payment can be an abstract concept, especially for younger kids. However, if you pay for things with cash, your child will see the money leave your hands and understand that it’s not an infinite resource. Count what’s left after you make purchases and revisit the budget to see what you still need to buy. Depending on your bargain hunting, you might be under budget. If you’re over, you need to reevaluate what you’re planning on purchasing.
The holidays offer us the opportunity to model healthy spending habits during one of the most expensive and stressful times of the year. Not to mention, educating your kids might also help you keep better track of your holiday spending. Use this holiday season to instill good financial habits into your children. In doing so, you get to spend some quality time together, and let’s be honest—that’s what this time of year is really about.