The Gift of Financial Literacy

Holiday indulgence is nearly impossible to avoid particularly during challenging economic times, but financial peace and understanding may be the best gift you can give to others, and yourself. Here are a few ideas for helping spread financial lessons this holiday season.

• Give a budget. The holidays present a perfect opportunity for teaching children about money. With your child, set a budget—maybe ten to fifteen dollars—to spend on gifts for everyone. Setting a limit can help children to carefully think through how much to spend on each person and  makes them think through their gift recipient list, elucidating the fact that you cannot always buy everyone a gift. This simple exercise incorporates the basic concepts of prioritizing and budgeting.
• Give back. Consider making a donation to a charity in someone’s name. Some organizations let you make the donation, and they can pick the charity. This is another good way to incorporate a life lesson, giving back, into the holidays. Plus, donations to charity are a tax write-off!
• Give saving. Saving is something that takes time to learn, and often longer to appreciate. Savings bonds make great gifts for teaching just that. Help give someone a jump on their retirement fund by contributing to an IRA for them. Or buy a share of stock in their name—for teens and young adults this is a great way to teach investing and monitoring investments. For the younger children, look for gifts that make saving fun, from the basic piggy bank to financial games, books and toys.
• Give yourself a break. Remember, the holidays are not all about spending. If your budget is particularly tight, be up front with family and friends about your budget this year, and focus on spending time together instead.

Do you have other tips for a financially fit holiday season? Share them here! Together we can all have a financially happy holiday season!