Did your teens receive money or gift cards during the holidays? Have they spent it all yet?
Many kids will have spent at least some of their gift money during the holidays. Boxing week sales can be much too enticing for anyone with a fist full of cash. However, for teens who didn’t blow all of their money right away, this is a great time to help them learn how to plan what to do with what they have left....and what they might receive throughout the year.
Explore this Teen Budgeting Series:
- 3 Tips to Help Teens Learn Money Management Skills
- How Do Part-Time Jobs Teach Teens to Budget?
- Use Back to School Shopping as a Financial Literacy Lesson
- How Kids Can Spend Gift Money Wisely - You Are Here
- What to Do If Your Teen Wants a Cell Phone
- What Teens Should Know Before Buying Their First Car
Plan How to Spend & Save Gift Money
Teens are usually quite delighted to choose exactly what they want when they receive birthday or holiday gift money. However, being able to choose just what they want and for the right price, comes with a bit of homework. Here’s how parents can help:
Prioritize a List of Wants
Talk to them about deciding on certain items at various price points ahead of time. Then when something goes on sale, they know if they should buy or wait. This can also help reduce impulse spending because they’ll have a plan for what they want to buy and when.
Ask your kids to prioritize their list in terms of what they really want and why. The money isn’t endless, but it can feel like that until they start spending.
Work Together with a Sibling
Encourage siblings to work together so that they don’t both decide to buy the same item, like a gaming console, which could possibly be shared.
Help them investigate features, prices, incentives, required add-ons (e.g. batteries, cases, cables or memory cards) and warranties.
If your teens are looking at cell phones, stay actively involved in their research efforts.
The Benefits of Planning Ahead
Doing their homework ahead of time will help them know a good deal when they see it, and not fall prey to peer pressure or advertising hype. They may also realize that it would be worth buying a previous model for a better price. The latest and greatest comes at a premium, and can get old fast.
The Safest Place for the Cash
As teens grow up, buying gifts for them gets either harder or more expensive – or both. Giving money towards a purchase is often a realistic balance between family members being able to afford a gift and a teen getting what they want.
If it turns out that for now, the safest place for their gift money is in their savings account, they might get the biggest gift of all; learning how to save and plan for what they want to buy.