The holidays are a great time to teach your children the real life skill of budgeting. Educating your adolescent teenager or preteen child the basics of budget planning is something that they can use now and for the rest of their lives. It will last long after their iPods stop working and their old Xbox merchandise is sold on eBay. By following this advice of gift giving and receiving there will be opportunities to teach your kids about budgeting. With these lessons learned, there will be less money coming out of your pocket as they learn to stretch their holiday dollars.
The first thing you want to make sure is that your kids understand that Mom and Dad are not made of money. That unlike Santa Clause, there is a limit to your finances. Most teenagers have no concept of how much their electronic toys cost. They just keep repeating the never-ending statement of, “I want everything on my list.” This is your opportunity to explain to them that you have a budget for the holidays. That there is a certain amount you are going to spend on them this year. Have them take their list and research what the costs are for each item. Let them realize the true cost of Guitar Hero, or a PlayStation console. Have them prioritize that list based on your holiday budget. If the items exceed the budget you had planned, let your teenage know they can make up the difference by doing extra chores around the house.
For those items that didn’t make the budget for the holidays, recommend to your teenager that they stash away some of their earnings now and in the future. That way they could purchase that new Wii console themselves. This will help your teenager understand the notion of saving money and sacrificing to get what they want.
Your teenager should also learn the concept of giving during the holiday season. They can learn to budget for this by first creating a list of those they wish to gift give. Show them how much they can use from their allowance and savings to purchase those gifts. Have them put a dollar amount next to each name on that list. They then have a written budget for each person when they go shopping.
It is never too early to show your teenager the art of clipping coupons, looking for sales in the paper or the internet, and shopping at your local discount store. If your teenager lacks the funds to give to everyone on their list, suggest to them to use their time and talents. Your teenager could bake cookies and give them as a gift or maybe a coupon book good for doing chores at a relative who lives close by. The ultimate lesson your teenager should get is that kindness is about more than money.