Christmas may be a little off, but if your child is saving for others to buy festive gifts, or perhaps topping up their own gifts, now might be the perfect time to realize the power of saving.
Here are some tips from Louis Hill, co-founder of Gohenry (gohenry.com), which, with parental control, allows children to learn how to manage their money …
1. Set savings goals
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Hill says: “Christmas is a great opportunity to teach your child how to budget wisely. Instead of just buying things on their behalf, encourage them to buy ahead and set a realistic budget for the gifts they want to buy.
“Then they can set savings goals in advance and work to buy special gifts for friends and family.”
For example, the GoHenry app allows people to set specific savings goals, such as a “gift to grandma” or “gift to a dog.”
2. Block the pester energy
Saving together can help the child understand the cost of things. If a child asks for something for Christmas this could potentially prevent the ‘pester power’ that goes beyond the family budget.
Hill suggests that if they ask for a Christmas gift that exceeds your spending limit: Items to have are not as attractive as some of them have to pay for themselves, so they can ask for something more affordable.
3. Edit to save
If your child has some work to do in return for their savings, this will help them understand their earning power.
“It gives them a sense of what this money really is, and they take pride in being able to buy something with the money they’ve earned,” Hill says. “If you have already provided a pocket money allowance, help them share part of their savings goal so they don’t spend it immediately. You can give them the option of taking on extra work to earn a little extra for their gift.
4. Shop around
Hill suggests that parents can help their child understand how to make more budgets, shop and compare prices. Looking for sales, promotions or discount codes and identifying hidden delivery fees can help kids become savvy savers.
5. Try making homemade
Handmade gifts, knitting scarves, bookmarks or even making cakes are a great way to further Christmas coins, Hill suggests.