Christmas may still be a little stretch away, but if your child is saving up to buy festive gifts for others, or to top up their own presents perhaps, then now could be the perfect time to help them understand the power of saving.
Here are some tips from Louise Hill, co-founder of gohenry (gohenry.com), an app which, with parental controls, enables children to learn how to manage their money…
1. Set savings goals
Hill says:
“Christmas is a great opportunity to teach your child how to budget sensibly. Rather than just buying things on their behalf, encourage them to plan ahead and set a realistic budget for the presents they’d like to buy.
“They can then set savings goals well in advance and work towards buying special gifts for friends and family.”
The gohenry app, for example, allows people to set up specific savings goals, such as “gift for granny” or “gift for dog”.
2. Prevent pester power
Saving up together can also help a child to understand the cost of items. This could potentially prevent ‘pester power’, if a child has asked for something for Christmas which is beyond a family’s budget.
Hill suggests that if they’ve asked for a Christmas present for themselves which is beyond your spending limit:
“Rather than just giving in, explain that you can help pay towards it if they save towards it too. That must-have item may not seem so appealing if they have to pay for some of it themselves, so they may end up asking for something else which is more affordable.”
3. Earn to save
If you’re child is doing some chores in return for having their savings topped up, this can help them understand the power of earning. Hill says:
“This will give them a sense that the money is really theirs, and they’ll feel proud when they’re able to buy something with money they’ve earned themselves.
“If you already provide a pocket money allowance, help them allocate part of it towards their savings goal so they don’t spend it straight away. You could also give them the option of taking on additional chores to earn a little extra towards their gift.”
4. Shop around
To make the most of budgets, Hill suggests parents can also help their child understand how shopping around and comparing prices can help. Looking out for sales, promotions or discount codes and spotting hidden delivery charges can also help kids to become savvy savers.
5. Try homemade
Handmade gifts, such as knitting scarves, making bookmarks or baking cakes are also a great way to make those Christmas pennies go further, Hill suggests.
