Teach Your Kids About Money With Their Holiday Gift Lists

Giving my children Hannukah presents is one of my favorite parts of the holidays. Seeing their faces light up when they open a gift is one of the best feelings in the world.

However, it can be very easy for kids to overlook the message of generosity that we are trying to teach for Christmas and Hannukah. They are bombarded by advertisements on all sides and constant reminders that the holidays are on their way — which means kids can often fall prey to the gimme gimmes. Many parents see this play out when they ask their kids to create a holiday wish list, and receive an eight-page, single-spaced list of expensive items.

But just because children can learn the wrong things from holiday gifts doesn't mean they have to. In fact, parents can use the practice of writing a gift list to teach their kids about budgeting, frugality, generosity, and managing expectations. This year, try one of the following holiday gift lists to help your children learn about money and the true spirit of giving. (See also: How to Use the Holidays to Teach Kids About Money)

1. The four gift list

Families following the four gift list rule will give each child:

  • Something they want.

  • Something they need.

  • Something to wear.

  • Something to read.

When your kids are penning their holiday wish lists, tell them to place each item in one of these four categories. You can make it clear that they can put more than one item in each category, but they will only receive one present from each category. This will help them to better understand the things they truly need and recognize how much they value their various wanted items. If everything on their list is a want, this exercise will help them manage their expectations. It can also potentially spur them to find needs, clothes, and books that they are excited to receive.

This rule is also very helpful for parents who often go overboard with gift shopping. When you see something adorable that you'd love to give your child, you'll have to decide if it's worthy of being one of only four "somethings" on the list.

2. Include gifts to others

Last winter, my sons were delighted to watch the animated adaptation of The Snowy Day by Ezra Jack Keats on Amazon. We had long been fans of the classic book, and the sweet story of Peter's adventure in the snow was expanded to tell an animated Christmas story in this short film.

One of my favorite parts of the adaptation was the story of Peter's Jewish friend Layla, who delivers a gift to a charity on the sixth night of Hannukah. She explains that it's her family's tradition to give instead of receive on that night of Hannukah, and she and her mother have picked out something special to give away.

This tradition is very well-suited to Hannukah, which lasts for eight nights. Parents can easily set aside one night to be about giving to those less fortunate rather than receiving — but any family can encourage their children to think of others when making their holiday gift lists.

In addition to writing down the things that they want, your kids can also include a list of gifts they can give to others. These could be traditional gifts for families in need, or they can be more creative, like writing letters to deployed soldiers or volunteering. By including a place for giving back on their holiday wish list, your kids will learn to associate generosity with your holiday traditions.

3. Create a gift-giving theme

For older children, a fun way to celebrate the holidays and teach frugality is to set a theme for gift giving. For instance, Stacia Mcclure's family would give everyone a hard spending limit, and specify where everyone could shop: "One year, we decided all gifts had to come from a truck stop — and gift cards were excluded. My dad still talks about that year because he got an entire box of Necco wafers. The hospital gift shop Christmas was also quite entertaining."

Other types of holiday themes might include only buying "As Seen on TV" items, books, games, or food items.

Picking a "theme" helps teenagers learn to be creative within a spending framework, which is excellent practice for learning how to be frugal. A teen who can have fun and give a meaningful (or at least hilarious) low-cost gift from a truck stop will learn to think outside the box when it comes to tougher money decisions. (See also: 5 Steps to Stress-Free Holiday Gift Giving)

4. Ask them to pick a stock

Several years ago, Stephanie McCullough's daughter asked for a new iPod for the holidays. "Instead, I bought her two shares of Apple," McCullough says, "which cost about the same as a new device at the time. There was no way to know this at the time, but the stock has skyrocketed since then."

If you let your children know that you plan to buy them a share of a company they like, you will not only be giving them a gift that will keep on giving, but you can also help to spark an interest in finance.

They can either pick a publicly-traded company they like, or they can do a little research into how well their favorite companies have fared in the market. The latter will help them start to get a sense of figuring out what makes a good investment. Even if they don't research their stock before including it on their gift list, you can invite them to track the stock's price over time to see how their gift is doing.

5. Include a time gift

As much as your children love ripping the wrapping paper off a new toy, what they really want most is to spend time with their parents. You can give them the gift of your time by asking them to include a request on their gift list for something you can do together. For instance, your child might list "baking cookies together" or "going fishing together" on their wish list.

While you could always create a "coupon" for the requested time gift, you can also find a small tangible item you could give your child to use for their time gift. For instance, you might give them a new cookbook that you can peruse together to find the perfect cookie recipe, or a fishing hat for them to wear next time you go to the lake.

By having your child include a time gift request on their holiday wish list, you are teaching them that the best gifts come from being together, rather than spending lots of money.

The benefit of limits

The magic of the holiday season does not come from tearing into an enormous pile of presents, even though much of our culture tries to convince kids otherwise. Teaching your children to use frameworks for thinking about their holiday gift wishes can help them to better appreciate the real lessons of the season, as well as learn some important money skills that will last them well into adulthood.

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Teach Your Kids About Money With Their Holiday Gift Lists

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