Teaching Kids About Money This Holiday Season

You better comprehend, you don’t want to cry, you better not overspend—I’m telling you why! The holidays are a fun time for kids. It’s also a perfect opportunity to teach them about managing money.

With all the excitement of gift-giving, it’s easy for kids to go overboard. But this is the time to introduce them to smart financial habits that will last a lifetime.

Kids often feel the excitement of gift-giving and spending. However, it is also important to teach them the value of money. They should learn how to use money wisely. Here are a few key lessons to introduce during this festive season.

Understand Where Money Comes From

Before planning holiday spending, ask kids, "How much money do you have to spend this season?" Talk about where money can come from, like allowances, gifts from family, or money earned from chores. Teach them that money is limited, so it’s important to make careful choices to stretch it throughout the holidays.

Create a Budget and Stick to It

Teaching kids about budgeting is one of the most valuable lessons they can learn during the holiday season. Help them create a budget for gifts, decorations, or holiday treats, and show them how to track their spending. By saving a specific amount of money, kids can learn to prioritize their spending. They will also understand the importance of living within their means.

• Where is the money coming from? Help your child understand the source of their spending money, whether it's from savings, allowances, or chores.
• How many gifts are needed? Make a list of people to buy for and discuss how much can be spent on each gift.

Learn more about opening a Lil' Pioneers Savings Club account for your kids.

Differentiate Between Needs and Wants

Help kids know the difference between things they truly need and things they simply want. For example, a new winter coat might be a need, while the latest toy or game is likely a want. Invite them to think about purchases by asking, "Is this something I’ll use often, or just something I’d like to have?" Understanding this difference helps kids make smarter financial decisions and avoid spending on non-essential items.

Here are some examples:

Needs:

• Winter coat
• School supplies
• Shoes for everyday use

Wants:

• New video game
• Extra toy or gadget
• Trendy clothes for fun

Get Creative with Gifts

Not every gift needs to come with a price tag. Teach kids that homemade gifts or thoughtful acts of kindness can be just as special as store-bought ones. Encourage them to think about what they can make, like a drawing, a handmade card, or offering to help with chores. Remind them they can also use their Lil Pioneer Bucks to save or buy small gifts for siblings or friends.
Here are some low-cost or no-cost gift ideas:

• Homemade crafts or art
• A coupon book with offers for helping around the house
• Baking cookies or treats to share
• Writing a heartfelt letter or making a personalized card

Saving for the Future

It’s never too early to teach kids the importance of saving. Show them how setting aside a little each month adds up over time. Use Frontier Bank’s financial calculator to show how saving $10 a month in their Lil Pioneers Savings account could give them enough to shop for next year’s holidays. Saving regularly helps avoid the stress of last-minute expenses, making holiday shopping more enjoyable.

Stay Safe with Online Shopping

When kids shop online or help their parents, safety is key. Teach them to recognize secure websites by looking for "https" and a padlock icon in the address bar. Remind them never to share personal information like addresses or passwords.

Explain the dangers of online scams and how to avoid fake websites or deals that seem too good to be true. Keeping safety in mind will help protect both their money and personal data during holiday shopping.

Read more on the different scams and how to spot them right away.

The Importance of Giving Back

Teaching kids to give back during the holidays builds strong values. Explain how donating old toys, creating holiday cards, or volunteering their time can make a difference for those in need. Show them that generosity is part of financial responsibility.

Kids can learn that giving isn't just about money—it’s about supporting others and contributing to the community. Helping others can be just as rewarding as receiving gifts.

Ways kids can give back this holiday season:

• Donate gently used toys to a local charity or children’s hospital.
• Create homemade holiday cards for nursing homes or neighbors.
• Help a neighbor by shoveling snow or doing small chores.
• Participate in a holiday food drive with family.

Read more on how you can give back more as a family this holiday season.

Start Teaching Financial Lessons Early

The holiday season offers a perfect opportunity to teach kids valuable lessons about money. By helping them understand spending, saving, and giving, you’re setting them up for a strong financial future. These skills will not only help them during the holidays but also in life.

Use our financial literacy activity sheets to make teaching your kids easier.

Get your kids to start saving today with a Lil Pioneer Savings Account at Frontier Bank. It's a fun and practical way for them to learn about managing money while earning rewards.