(ARA) – Commercialism runs rampant during the holiday season. But all the hustle and bustle that goes along with gift giving is a great opportunity to teach children how to shop for gifts and manage their money.
“Children love giving and receiving gifts. By getting them involved in the gift buying process, you can make it a valuable learning experience, too,” says Scott Oberkrom, director of Community Investments at American Century Investments. “The best way to teach children about money is with real-life scenarios they can comprehend. Purchasing gifts for their friends is a great opportunity for them to learn.”
YesYouCanOnline.info, a Web site that helps parents teach their children good financial habits, offers the following ideas when preparing for this year’s gift giving:
The first step is to set aside money each week for a gift fund. This might be a good time for your child to set up a savings account. Depending on the balance, they might even earn a little interest. Help them learn to split their allowance or other income between fun money and savings.
If their normal allowance isn’t enough to buy gifts for everyone on their list, discuss ways they can earn extra money for their fund, such as raking leaves, babysitting or doing other neighborhood chores. You might also explain how to cut back, such as skipping weekly trips to the candy store so they can purchase a gift for their sibling instead.
As they save, sit down with your child and make a list of people with whom they would like to exchange gifts. Do they really need to give presents to their second cousins or their tent mate from summer camp? The more gifts they give the more money they need to spend. Instead of giving gifts to everyone, they can always make a homemade craft or send a holiday card.
After your child has some savings and determines who they want to give gifts to, it’s time to head to the store and do some shopping. This is a great learning moment for children to start comparison shopping. To help kids understand comparison shopping, ask these questions:
* Is this the lowest price for this item?
* Can it be negotiated?
* Are coupons or discounts available?
* Is it worth paying a little more for a gift that is environmentally friendly or supports a local merchant?
* Is the gift a worthless trinket that will break or high-quality with long term benefits?
* Does the store, in person or online, provide gift wrapping or free shipping?
* If your child’s friend doesn’t like the gift, can it be exchanged?
“By starting early and spending their own money on gifts they choose, kids really get involved in the gift giving process while learning valuable financial lessons along the way,” says Oberkrom.
Courtesy of ARAcontent
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