The Best Tips for the Christmas Season

Most parents don’t really think of Christmas as a good time to teach kids life lessons, and kids certainly don’t!

It’s a time for celebration and giving. And this is exactly why it can be a great time to teach your kids some valuable tips on budgeting and money.

From a parent’s point of view, the idea of Santa grouping kids into naughty and nice columns is the greatest lie ever told to children; and it’s really just a way to keep your kids in line, at least for the week before Christmas. But it’s actually grounded in a financial truth.

You have to earn the things you want, by behaving in a certain way. And the same goes for saving: if you want a new car you have to earn it by exercising good savings behaviour. A ‘nice point’ is Santa’s Christmas currency, and kids understand this from a very young age.

So what does this mean for lessons in money? Make your kids earn it. Get them to write a letter to Santa listing what they want for Christmas, and then write one back (from Santa) proposing how they work towards it – for example, taking out the garbage, mowing the lawn, or keeping their room clean. This will introduce your kids to goal-based saving. And after Christmas, you could start a pocket money system where they earn money by completing the same chores they did leading up to Christmas.

Another way to teach your kids about money and goal-saving is by the type of gift you give them. This doesn’t mean buying your six-year-old the revised edition of “Think and grow rich”, but it does mean putting some thought into what presents might benefit them.

There are also some great board games out there for teaching kids about savings and money. Two of the better ones are Moneywise kids and Money Bags. Both introduce kids to money in a fun way.

What’s more, kids love to pretend to be grown-ups. That’s why little boys love fire engines and little girls love having tea parties. A popular ‘grown-ups’ toy, for the three-to-six age bracket, is the toy teaching cash register.

And don’t forget about the humble piggy bank! The beauty of it is it teaches kids about saving in a tangible way. They can feel their piggy bank getting heavier, and they can hear the extra coins rattling around. The only advice I’d give is make sure you buy a rubber one. Kids can get a bit carried away in the breaking-open ceremony!

But back to Christmas gifts… Buying kids suitable presents is one thing, but it can also be a good time for parents themselves to learn. The First National Bank of Dad and Money Doesn’t Grow on Trees are excellent reads for parents who want to teach their kids about money management.

And if you want to give them a lasting present, open a Youthsaver account with CommBank. You can set your kids up with a savings account and organise regular deposits. A year ago I started one for one of my kids and it really has been the gift that keeps on giving. After starting with a few deposits my son has now taken the reins and, of his own accord, contributes a portion of his pocket money into his account every month.

So there it is: some of my best tips for the Christmas season. Just remember, teaching your kids about money over Christmas is a good way to ensure you’ll get better presents from them in the future!

All the best for the festive season.

Lyn McGrath is the Executive General Manager of Retail Sales for Commonwealth Bank, but more importantly she’s the mother of two.