Here at Big Life Project our Finance and Money Management module exists to give students practical insight into healthy finance. Money management is often overlooked in education, but we all know what mismanaging money can lead to so we think it’s really important to teach kids money skills in school.
However, it is just as important for parents to teach money skills at home and what better time of year to do this than during the run-up to Christmas?
Teaching your kids about money isn’t always easy so real-life examples are often the best way to model good money-handling skills. Christmas offers many natural opportunities, from budgeting to buying gifts and becoming savvy shoppers, to tracking how much you are spending.
We have put together a few tips for you to follow to start teaching your kids about money management over the festive season.
Firstly, sit down as a family and decide how much you are going to spend on Christmas. How much can you afford to spend on Christmas without getting into debt? Things to include in your budget discussion are:
- Gifts for immediate family
- Are you buying gifts for extended family/ friends/ teachers/ colleagues?
- Cards and wrapping paper
- Parties to attend – food, drink, travel
- Family meals or parties you are hosting.
Think carefully about who you are going to buy gifts for and perhaps make agreements with friends and colleagues that gifts are not necessary. Agree a budget for gifts for immediate family and remember that gifts do not need to be expensive to show someone how much you love them. Well-thought-out and homemade gifts can be just as wonderful.
Schedule ahead when it comes to Christmas parties and events and only plan as many as you can actually afford. Remember that going out doesn’t have to mean drinking alcohol and eating at home before you go out can also save money.
Regardless of how young your children are setting a budget for the amount you will spend on gifts is a great way to get them involved and help them to learn about the value of money.
- Track your spending
Get children involved in helping you track what you spend. Create a spreadsheet or write a list on paper or even on a white board. Every time you purchase a gift make a note of who it is for and how much you spent. Keep a running total.
If you spread the purchasing of gifts out over a few weeks or even months running up to Christmas it will seem less painful.
When you go to the supermarket keep your receipts and track the amount you are spending on food for the festive season. Make sure you stick to the budget you all agreed as a family.
To help your kids learn how to budget and track what they spend you can give them a certain amount of cash and a task to complete, such as buying gifts for certain family members.
- Find the best price
There are so many deals and offers on the internet these days that it can pay to shop online when you’re looking for a bargain. Involve the kids in helping you look for items that you want to buy and compare prices across several different websites, or compare the same item from multiple sellers on Amazon. Create a challenge or make it a game – who can find the best price!
Don’t impulse buy, instead wait to see if any offers come up, for example use days such as Black Friday to see whether you can get the items you want at a reduced price. But never buy things just because they are reduced, only buy the things you have already decided on.
Signing up to newsletters when you visit a store’s website can often get you discounts as well, as companies tend to mail out to their subscribers with offers and vouchers.
If you shop regularly in one supermarket sign up to their loyalty card scheme and make the most of the points you get, for example Tesco’s Clubcard offers points that you can convert into cash to buy items from the Tesco website, in store or for days out.
- Take the kids shopping
Get the children involved by letting them choose a special gift for a certain person and pay for it themselves. This way they will take ownership of the task and can delight in the giving. Make sure they are the one to deliver the gift so that they can enjoy the reaction of the recipient.
Take the kids food shopping with you and give them cash to pay at the checkout. It is all too easy nowadays to buy everything using a debit or credit card, making it harder for children to really understand the amount things cost. By actually counting out the cash and seeing the amount they are spending will help them to understand the cost of food. It is also good for their maths skills to physically count out the money and get the change.
In the supermarket get the kids to help you look for offers and daily deals, and compare the price of different brands. Make decisions together about what is the best value item and whether you actually need everything that you are putting in your trolley.
When you have finished shopping discuss any savings you made and how you were able to do this. Put any money left over from the amount you budgeted in a glass jar and watch this amount grow to teach the kids about saving money – the glass jar is a very visual goal to save money and an excellent reminder of how good decisions can help this pot to grow. Explain that the decisions they made helped the family to save this amount of money.
If you have a substantial amount left over once you have finished shopping you could consider buying a gift for someone in need, donating to a Christmas charity, or doing something memorable as a family.
If you choose to buy a gift or make a donation to someone in need or less privileged than yourself it will teach the children about and generosity and the joy of giving. Talk openly with your children about how some people may be in need and have less money than yourselves, and in some circumstances not enough money even for Christmas.
Money lessons are not all about planning, sticking to a budget, spending wisely and saving, they can also be about the importance of giving, especially at this time of year, during the festive season.
Christmas is about so much more than just presents but it seems like the perfect time of year to teach kids practical money skills such as budgeting and spending wisely, as well as helping them to learn about gratitude, compassion and giving.
Merry Christmas and happy holidays!
Our Finance and Money management module includes lessons on ways to save money, banking, looking for a job and understanding how you get paid. To find out more visit our Modules page or get in touch with us via our Contact page.