Teaching children financial lessons during the holidays


The holiday season is upon us! 2017 has flown by and we are only weeks away from Thanksgiving. Friday, Nov. 24 means a mad dash to be the first in line at your favorite store for Black Friday shopping, or maybe you shop from the convenience of your living room on Cyber Monday. Either way, the holiday season can turn into a stressful time of juggling family obligations, parties, and last minute to do’s before you ring in the New Year. However, the holiday season can also be an opportune time to teach your kids lessons about giving and basic financial literacy. Below are a couple of ideas to consider.

Discuss charities and giving back

Children are inundated with advertisements for the latest must haves each holiday season. They are conditioned for receiving during the holiday season. Take their holiday wish list and review it with them, then ask them which toy (within reason) they would like to give to a child in need. Explain that not everyone may be as fortunate as them. You could also talk with your child about some of your favorite charities and how they help. Then tell your child you will be making a donation (if appropriate) to that charity this season and why it’s important to give back.

Giving doesn’t always have to be monetary either. Instead of writing a check to a charity, you could take your children with you to volunteer for a day at a soup kitchen, a food bank, or some other deserving organization. Show them that giving your time can be just as valuable as giving your money to a worthy cause. Instilling in children the concept of giving back to their community is a lesson that can last a lifetime.

Allowance and savings accounts

If your kids are old enough to help out around the house, consider establishing an allowance system for completed chores. This does not mean giving them $20 a week just because. Certain chores can have a set value: take out the garbage for week ($5), fold three loads of laundry ($5) for the week, load and unload the dishwasher ($5), etc. You should ensure that the chores are completed to your standards before paying them. The earlier children learn the value of a dollar the better. Once your children get used to completing chores in order earn their allowance, sit down and have a deeper discussion with them about the importance of saving the money that they earn. If there is a toy or gadget that they really want, don’t automatically go out and buy it for them. Make them work towards a savings goal and buy it themselves (or at least contribute a portion of the cost).

Consider opening up a savings account at your local bank for your kids to allow them to make deposits from their allowance. This could be a good segue to talk with your kids about proper budgeting as well as not spending more than what they earn or have saved. Basic financial topics could be discussed such as what is the difference between a savings and checking account or what is the difference between a debit card and a credit card.

The holiday season can be a great time to point out and show children that not everyone may have the same advantages that they have. The recent events with Hurricane Harvey and Hurricane Irma, as devastating as they were, give a high profile opportunity to point this out. Starting out young with a habit of saving, giving back with some sort of community service, and being responsible with how they approach their money decisions are not just good financial lessons, but good life lessons.

   

Gary E. Croxall, CFP®

Soren E. Croxall, CFP®

Croxall Capital Planning

Advisory services provided by Croxall Capital Planning (CCP), a Registered Investment Advisor. Separate advisory and securities services may be provided by National Planning Corporation (NPC), member FINRA/SIPC, and a SEC Registered Investment Advisor. CCP & NPC are independent and unrelated companies. Please consult with your representative to confirm on which company’s behalf services are being provided. NPC and CCP do not provide tax or legal advice. The information contained herein is for general education and is not intended as specific advice or a recommendation to any person or entity. The opinions expressed in this article do not necessarily reflect those of NPC.