Back to articles Teaching Children How to Budget Monetary Gifts at Christmas

Categories: Parenting Family Guides

When relatives want to know what they can get for kids this Christmas, it can be a difficult question for parents to answer.
Some kids seem to have everything and you don't want to spend money on a toy that will add to the pile already stowed away somewhere in the playroom or basement. It is becoming increasingly popular for relatives to give children a monetary gift and allow the child to do what they would like with the money. Monetary gifts allow parents a great opportunity to begin teaching their children about financial responsibility.

When a child receives, let's say a Christmas card from Grandma with $30 inside and another card from their Aunt and Uncle with a $25 cheque for Christmas, there are a few scenarios that families could choose. Let's look at a few.

Take your child out to hit the Boxing Day sales so they can spend their money buying more toys.

This would probably not be the best way for a child to spend their monetary gift. If we look at the lessons they will learn from this scenario, we see a focus on getting more things right now. There is no delayed gratification or time to appreciate the gifts they already received on Christmas morning.

Head to the bank and make them deposit the money into their bank account.

Again, this scenario is probably not in your child's best interests and could backfire on what you want them to actually learn about handling money. Parents who make their kids put their gift money away in a savings account, or forbid their kid's access to their money once they've opened up an account can be doing their children a disservice. You're not teaching your children good money lessons but rather could be doing the opposite. Your child could feel that they're being forced to save their money and rebel once they get a little older and have access to spend money on whatever they choose.

Give your child tips on budgeting and let them decide how to split the money accordingly.

If you want to raise a financially responsible child, this is your best option. You can take the opportunity to explain that money isn't just used for SPENDING or SAVING but can be budgeted for other needs such as helping others and establishing long term goals. Having children set up different jars or piggy banks for their budgeting needs is a great way to begin. Our children have four piggy banks that they use for SPENDING (pocket money), SAVING (for a more costly purchase), SHARING (to give back and help others) and SCHOOLING (savings for post-secondary school education).

However you choose to guide your child's use of monetary gifts, try to incorporate some lessons in financial responsibility.

Visit some of these great websites to get you started! - Features advice for parents on raising financially responsible children along with the award winning products 'The 4 Little Pigs' (a financial values book for children) and the 4 Piggies Financial Kit for Kids - Features advice, printables, games and videos on teaching your child about money and how to use it to SPEND, SAVE and SHARE - A fun financial literacy site for kids where they can play games and learn about earning, spending, saving, and investing.

Jeanette Ramnarine is a mom, educator and award winning author. She is the CEO of Four Piggies Publishing which gives parents and teachers fun and creative tools to financially educate children. Her dedication to teaching and inspiring youth has been recognized by The Government of Canada. She continues to share her message through writing, speaking engagements and media interviews. You can contact Jeanette through her website at