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Money Smart Kids


How to Put Santa on a Budget

Janet Bodnar

Here are five ways to teach kids the importance of keeping holiday spending under control.



I’m always impressed by the wonderful responses from readers to my annual “Put Santa on a Budget” column. Last year I heard from Pam, who says she gives her children a budget when they’re making their holiday lists so that they really think from the get-go how much their items will cost. “I love finding ways to incorporate budgeting into kids’ everyday lives,” says Pam. “What a fabulous way to let them experience true money-management techniques.”

SEE ALSO: 13 Ways to Waste Money During the Holidays

Pam is right, and she is my inspiration for this year’s column. I save all the press releases I get on how to shop smart and avoid debt during the holidays, and the pile is at least an inch thick and growing. If kids picked up on this theme early on, they’d be less inclined to overspend as adults -- and I wouldn’t have to save so much paper.

So here are five ways to convert holiday-shopping madness into a learning experience for children:

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1. Teach kids how to budget. Pam’s idea fits in neatly when youngsters write their own wish lists. Give them a ballpark figure to work with, or have them attach dollar amounts to everything on their list. My son did that one year, and the grand total exceeded $1,000 -- which was shocking even to him. Needless to say, he pared down the list to a reasonable amount, which was the point of the exercise.

2. Teach them to be thoughtful. Budget basics carry over when children are old enough to use their money to buy gifts for family members and friends. Kids often assume that big is better, so they need to learn that small can be more affordable -- and thoughtful, too. If they’re buying a gift for someone who likes to draw, how about colored pencils or pens, or self-inking stamps? (I saw a set in Good Housekeeping that sells for less than $5 at Michael’s.) Or they could add to someone’s collection of mini racing cars or other collectibles. Chocolate lovers would appreciate a holiday mug filled with packets of hot cocoa mix.

3. Teach them to think outside the box. It doesn’t necessarily occur to children that they don’t have to buy an individual gift for everyone on their list. They can stretch their budget by pitching in with a sibling or organizing a “secret Santa” gift exchange with their friends. And they don’t always realize that a present doesn’t have to be a tangible thing. They can give a gift of time or service, such as doing chores for an elderly family member or organizing family photos (I’d still love someone to do that for me -- hint, hint).

4. Teach them to be generous. This is a slam-dunk at this time of year. Have the kids earmark some of their money to buy a gift for a local toy drive. Or they could choose a gift from a site such as Heifer International (www.heifer.org). As little as $10 buys a share of cows, sheep, goats, rabbits or trees. If you’re dropping off used clothes or toys at a local family shelter, bring the kids with you so that they can see charity in action (see 4 Ways to Teach Kids the Joy of Holiday Giving).

5. Teach them not to go overboard. You want them to enjoy getting -- and giving -- over the holidays, but you don’t want them to lose perspective. That starts with you; if you don’t get carried away, neither will they. With older kids you can even have a discussion about your own holiday budget and how you’re going to limit credit card purchases so that you’re not still paying for Christmas gifts at Easter.

In our extended family, our Thanksgiving tradition is to avoid the stores on Black Friday. Instead, we parents do something touristy in D.C., the kids organize a fun activity (this year it was duckpin bowling), and we all meet for dinner at a favorite Mexican restaurant.

I welcome your suggestions on how to keep your cool during the holidays so that I can use them for inspiration next year.

Follow Janet's updates at Twitter.com/JanetBodnar.



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