Now that Thanksgiving is over, it’s time to start thinking about budgeting for holiday gifts. Whether you celebrate Christmas, Hanukah or some other big holiday, December is typically an expensive month, especially if you have kids. But it’s also a great time to teach your children about smart money management. Here are some tips for showing your kids how to spend on a budget during the holidays.
Buy Gifts on a Budget
Most kids don’t quite grasp the responsibility and reality of a budget. During the holidays, they may tend to get overly excited about spending money on gifts for you, their friends, or other family members. Try giving your children a “Gifts to Buy” budget with a set spending limit. Start by making a list of everyone the family can afford to buy gifts for, then set a total dollar amount for all the gifts. Remember to talk to you children about additional costs. They should consider miscellaneous expenses when they are doing budgets, such as sales tax, the cost of shipping when buying gifts online and the cost for wrapping paper.
Try clipping coupons, checking store apps for specials, searching store flyers and browsing retailer websites for price differences with your kids as well, to teach them how to search for the best deals.
Make Homemade Gifts
It’s important to teach your kids that gifts don’t always need to be bought. Homemade gifts like a photo collage, a hand-written story, or a handcrafted piece of pottery, can often mean more to the recipient because they are personal. Talking to your children about making gifts also encourages creativity and imparts a good financial lesson about choosing an alternative when their budget is tight.
Set Gift Limits for Your Kids
To help young kids and teens get a better idea about managing money for the upcoming holidays, first show them how to set gift limits. Give everyone in the family a specific dollar ceiling for their gift list, so that everything they put on it can’t total more than the limit. This way your children must decide if they want their budgeted amount to go toward one big gift, or if they want many gifts at lower prices. You can take that a step further and put a price limit on individual gifts as well. Teaching them to set limits will help them better understand how you go about making money decisions on a daily basis.
Support Local Charity Organizations
Giving to those less fortunate can be more rewarding than receiving gifts for the holidays. Teaching your kids to give back will go a long way toward showing them the value of helping others and making practical decisions on spending money. Have them budget for one donation to a charity based on their interests. For example, if your daughter loves animals, a local animal shelter would be a good place to give. Another great way to instill the holiday spirit in your kids year-round is to volunteer with them at a charitable organization in your area during school breaks.