The Daily Standard
Story Archive
Parents can give their children the gift of financial wisdom with honest, age-appropriate lessons during the holidays.
Many parents during the holiday season would rather spend time spoiling their children than worrying about finances.
But the holidays present numerous approachable, teachable moments when it comes to financial well-being, according to Viktoria Jurkovic, consumer affairs manager at the Ohio Department of Commerce's Division of Financial Institutions.
"Between the ages of three to seven, children develop financial literacy habits," she said. "Your kids are always watching. The holidays prove to be a good teaching moment because of holiday spending."
From actively participating in holiday shopping to researching affordable presents and understanding the core concept of budgeting, parents can incorporate lessons into holiday traditions and teach financial wisdom to their children, Jurkovic said.
For many parents, talking about money and finances with their kids does not come easy, she said. Some parents are stressed about their own finances during the holiday season and don't want to burden their children.
However, times have changed, Jurkovic said.
"Talking about money shouldn't be taboo. We shouldn't be hiding how our family operates," she said. "Your budget ebbs and flows, and kids will experience the same trials and tribulations. Why not have them learn and adopt (healthy) habits? It's a good opportunity to be realistic. When you're honest with your kids it takes the stress off of you and (can help) manage expectations."
Being open and honest about what one's family can afford is valuable information parents can share with their children, she said. A popular approach to gift giving on a limited budget is giving kids something they want, something they need, something to wear and something to read.
"There's also low cost or free activities for kids that ignite magic moments without breaking the bank," she said.
Jurkovic said one of the biggest lessons kids can learn is differentiating between wants and needs. Letters to Santa are a great place to start.
She suggested asking children to make two lists - one with all their wishes and another trimmed down to their preferred items.
"It gets kids to openly talk about their thought process … and allows them to home in on what it is they really want," she said.
Jurkovic added that making a list can help children determine if they want a gift because it's something they want, or if they want it because it's popular with their peers.
The Federal Reserve Bank of Cleveland also suggested having kids write down five things they need and five things they want and rank them in order of importance.
Kids can learn how to save money by putting it in a piggy bank or a special "holiday" jar to spend or donate at a later date.
Delayed gratification is another important aspect of budgeting and saving, Jurkovic said. Parents can illustrate this lesson by creating a special "holiday" money jar and placing it in a common area, such as the living room or kitchen, and regularly add to it.
"It could be a Christmas in July type thing where they see parents save money" and use it to buy a gift or donate it, she said. "It shows them how important saving is. A lot of adults live paycheck to paycheck because they didn't learn how to save. (Saving) is also something parents have to model, and sometimes parents need accountability."
She said piggy banks, safes, jars and other receptacles are essential, as kids can visibly watch their savings grow.
Children are observant from a young age, Jurkovic emphasized. Kids as young as three begin to pick up on behaviors and conversations parents have about money, she said.
"So playing store, counting, explaining why you can't buy something, these basic conversations spark curiosity in toddlerhood," she said. "They observe everything."
For pre-teens and teenagers, parents can encourage them to provide skill-based gifts during the holidays, such as completing a task for a grandparent or helping a younger sibling with homework.
If children do not have to buy gifts for extended family, Jurkovic said parents can involve them in the gift-buying process by assigning tasks. She said researching gifts, finding the best prices and setting a budget all help establish crucial financial management and planning skills.
Most importantly, Jurkovic noted that this is the season of giving.
"I want to remind folks that part of learning (financial well-being) is charity and teaching the importance of donating time, money and items," she said. "Being charitable is a very big component of learning financial literacy with kids."
Kids can learn how to save money by putting it in a piggy bank or a special "holiday" jar to spend or donate at a later date.
