Teaching Kids’ Money Smarts During the Holidays

Michele Borba November 28, 2011 Comments Off on Teaching Kids’ Money Smarts During the Holidays

Parenting tips to teach kids financial literacy and to be smart spenders and consumers during the holidays

Well folks, it appears that the “official” holiday shopping mania has begun. Those penny saver adds are life-size. TV commercials promising “sales of all sales” are non-stop. Black Friday sales hit a record high this week.  You and I know the advertising blitz will only go into high-octane mode as the holiday countdown continues. But while you’re searching for those deals and standing in those lines, keep in mind that these next days and weeks are also the perfect time to talk to your kids about money management and here’s why….

Study Results: “Teens Flunk Financial Literacy”

Approximately fifteen hundred high school seniors were recently asked basic facts about personal finance, and the great majority were stumped for answers. The results were not promising for our children’s future:

REALITY CHECK: Ninety-five percent of teens surveyed scored below a C in financial literacy.

Wonder why? Another survey finds a key reason for teens’ low financial scores:

REALITY CHECK: 80 percent of all college freshman admit to never having a conversation with their parents about managing their money. What’s more, almost one in four of these same teens say it’s just fine to blow as much as $500 without checking in with Mom and Pop.

(I’d love to be on their allowance, but that’s another issue).

The findings are hardly a proud parenting moment, but I also hope you are starting to get my drift. The truth is too many kids are flunking financial literacy and one big reason may be that we’ve failed to teach our children a few essential “money smart lessons.”

If you’re concerned about your kids’ future spending habits, then start your money talk now and there’s no better time than these next few weeks. Newspapers will be filled with coupons and penny savers. (My local newspaper was so thick I let my dog have a day of rest and not bring it into the house. Poor guy couldn’t get his jaw wide enough!) Television ads for holidays “deals” will air non-stop. Teen magazines will feature those supposed holiday “in” gadgets and “must have” items. Those are also perfect opportunities to let your kids know that money doesn’t come easy. It’s also the time to review that  you do have clear expectations and limits about your family’s spending during the holidays. Here are a few ways to weave in those crucial money chats over the coming weeks with your kids.

Using the Holidays to Boost Kids’ Money Smarts

Be a Good Role Model

Kids look to us as the example to copy so how are you doing in modeling money smarts to your children? Are your kids seeing you cut out those coupons? Waiting for the right price? Displaying smart spending habits? Prioritizing your “must-haves? Beware that your children learn spending and saving habits from you. How are you doing?

Monitor TV Consumption

Television is the one of the biggest culprits in fueling kids’ spending urges, and commercials are relentless in trying to get kids to buy, buy, buy. Research also shows that media impacts our children’s money attitudes and increases materialism.During the next few weeks those retailers will be pushing products and urging your kids to spend. So beware of those advertisements! Do take time to explain to your kids the real intention of those advertisers.

Use Real-Life Examples

Take your child shopping with you. I dare ya! But when–or if–you do, show him how you compare prices. Explain to her how you look for bargains. Use those outings as teaching moments that do instill good shopping habits.

Printable Christmas ListTeach Bargain Hunting

If your kids are purchasing gifts for siblings (or even you!) get them involved in checking out those penny saver ads. Have them clip out coupons. Tune your kids into the bargains at those dollar stores. Hit the outlet malls, and don’t overlook thrift stores and even garage sales. And tell them to watch for sales! Grandma will never know if her present was ten dollars less because Johnny waited to buy until sales day.

Cut Impulsive Shopping

Set a household rule that your child must write down any pricier intended purchase, and then postpone buying it for at least twenty-four hours. It’s a great way to teach kids to delay gratification and to “Think” before spending. (Profound concept, eh?)

A younger kid can draw it  on her “wish list.”

The wait time could vary from an hour or day to a week or month depending on the child’s age and maturity.  If your kid loses interest before the time is up, even she will agree that she didn’t really want that item after all.

Teach “Wants vs. Needs”

This is the “Gotta Have It NOW Generation” so a big step in helping today’s kids learn to be smart spenders is teaching the difference between “want it…” vs. “need it.” The trick is to get your kids to assess what they already have that is still in good shape and can be recycled, what’s missing and then what’s really needed is on the “need” list and holiday request list. Now your kids can create a holiday wish list based on real needs not wants to help prioritize spending.

Do One Store Shopping to Boost Consumer Skills

Your kids planning to do their own holiday shopping? If so, this is a great way to help teach them consumer skills. Consider choosing just one store that has the best bargains to take the kids this year (like Wall Mart, Target, K-Mart) for their gift-buying. By announcing, “We’re shopping only at this store,” the kids are forced to look for the best bargains in one place and you won’t find yourself driving to multiple stores (and bringing back multiple items). This is also the time for them to bring their coupons and shopping lists. Make sure you also have them compare prices of items so they understand value.

Consider After-Holidays Gift Buying

Seriously! I know more families who realize the best deals are December 26. Those parents set a new rule: “You receive a few items under the tree but wait for that pricier item the day after the holidays.” The kids learn to appreciate the value of a good deal, the parents are grateful to save a ton of money, and the whole family enjoys that day after shopping outing for everyone’s “one special–and better-priced-gift.”

All the best on your shopping!

Dr. Michele Borba, Parenting Expert

parentingsolutions150x193This article is an excerpt from The Big Book of Parenting  Solutions. For a complete guide to boosting your child’s character refer to the chapters on Ungrateful, Spoiled and  Selfish, Materialistic, Bad Manners which offer Research-based Strategies and Proven Parenting Solution as well as dozens of new  habits to teach your child to replace inappropriate ones.

For  more information on my work refer to my website, Michele Borba, follow me on twitter @MicheleBorba, or subscribe to the feed of my daily blog, Dr. Borba’s Reality Check.