Dec 20, 2017
Save the Green, and Skip the Red: How to Use the Holidays to Teach Kids about Money
With all the toys, gadgets, and games your kids may receive this holiday season – there's always that one relative (or five) that will gift them a fistful of cash.
It's never too early to start teaching kids about how to manage that gift money, and prepare for the future.
According to a study TD did in November, 94 per cent of Canadian parents consider themselves the biggest influence on the development of their child's money management skills. But nearly a third of them (31 per cent) can find money management hard to bring up.
So we thought we'd help you out – after all, it's the season of giving!
Here are three tips on how to jumpstart your kids' money management skills this holiday season.
1. Save a Percentage
Add up all the cash gifts your child receives, and save a percentage of it. Whether you choose 30 per cent, 40 per cent, or even 50 – saving a portion each time they receive a monetary gift can help kids understand that saving money is a priority – and a building block of financial health.
If you choose, try making that savings visual. Grab a jar or piggy bank, and drop the holiday cash in. When they receive money for birthdays, and other special occasions – drop that savings percentage in too. That way, your child begins to understand how money accumulates when it's saved, rather than spent.
And when it's accumulated enough, deposit the savings into an account to begin saving for your child's future university, college, or other plans.
2. Spend Smart
When they do spend, encourage them to spend smart. Give them the freedom to buy what they really want, but also use it as an opportunity to help them understand price comparison.
If they point out something they'd like to purchase, give them some options: suggest looking out for upcoming sales for that item, deals at another retailer so they can save more, and the like.
Getting kids into this habit today can make them savvy consumers tomorrow.
3. Give Back
Get kids into the spirit of giving by donating to a favourite charity. You and your child can choose just how much, but donating during the holidays is a wonderful opportunity to teach kids about giving more than just gifts.
Every little bit counts – and donating to charity can begin to teach your child about the importance of sharing, giving, and helping those most in need.
Need more tips? Check out TD's Smart Money Toolkit – a resource that allows you to browse by your child's age, and find out about developmental money milestones for each age group.
And if you need to brush up on maintaining good finances yourself, check out Money Matters – a financial literacy program for adult learners developed by ABC Life Literacy Canada in partnership with TD.