Santa’s Workshop: A Kids and Money Lesson Even Adults Could Benefit From

December 5, 2009 by Frugal Dad

participated in a unique budgeting exercise at their school, carefully disguised as a Santa’s Workshop. The idea was the kids were to visit the workshop a few days in advance of its official opening to develop a shopping list for friends and family, along with a Christmas shopping budget.

Our daughter came home with a pretty good estimate of what she’d need to complete her shopping. $32, to be exact. Most impressive? That included gifts for five or six family members – even her little brother! We negotiated a small advance allowance along with a few extra chores to work on over the weekend and handed over some of the shopping cash.

That morning, the kids were allowed to visit Santa’s Workshop before classes started and were allowed to select a number of gifts up to their budgeted amount – not a penny more. Imagine if we shopped under such strict guidelines. Spend the cash you have available for Christmas and leave the store. No credit cards; no layaways; no 90 days same as cash.

As parents, we don’t have to wait for Santa’s Workshop to teach these same lessons. Rather than buying gifts for your kids to give to siblings and friends, give them a budget and allow them to do their own shopping (with your assistance, of course). Here are a few ideas to reinforce with kids around the Christmas shopping season:

  • Start saving for Christmas way before the decorations are going up. We save for Christmas all year around, in a dedicated online savings account at ING Direct. Simply divide your annual Christmas budget by 12 months and move that amount to savings. The ultimate budgeting challenge for kids would be for them to set aside a little allowance each month throughout the year for this very purpose.
  • Have a list, check it twice!  Whether you are shopping for groceries or toys for kids, it’s always a good idea to have a list. Stick close to the list and you improve your chances of staying close to your budget.
  • We don’t shop with money we don’t have. In my roundup post the other day I mentioned seeing customers in front of me charging Christmas presents on credit cards. My daughter is also old enough to notice this, and often gives me a knowing look when we witness it together. Remind your kids that buying stuff on credit cards is a bad idea, because you usually wind up spending more up front, and paying more for each item when interest charges are tacked on.
  • Don’t forget giving. We do not give gifts with the anticipation we will receive them. To reinforce this idea, have your kids give a little of their own money to a cause they are interested in, or a local church or shelter. The more personal, the better.

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