Holiday Gifts and Kids - Taming the Holiday Wishlist Monster?

unicorn and mother talking to her daughter

Ah, the holidays — lights are twinkling, cookies are baking, and kids are busy crafting epic wish lists that rival Santa's naughty-and-nice log. But let’s get real: those lists? They’re long. And expensive. And stress-inducing. So how do we handle it without turning into the Grinch?

Do You Talk Money with Your Kids?

Whether you’re knee-deep in wrapping paper or blissfully kid-free, here’s a question: have you talked to your kids about money? And did your parents ever talk to you about money when you were young?

If the answer’s no, you’re not alone. But why, you’re thinking…? Well, research says kids start forming money attitudes by age 7. Yep, before they’ve even mastered the art of tying their shoes, they’re fully capable of grasping basic money concepts. Your kids may be young, but they are way savvier than we adults give them credit for. So, why not use this festive (and let’s face it, financially stressful) season to start the conversation and better prepare them for the “real world”.

The Wishlist Reality Check

No matter your kids’ ages, discuss the realities of gift-giving. Instead of letting wish lists grow into novels, sit your kids down for a little heart-to-heart about how gift-giving works. Spoiler alert: Santa doesn’t foot the bill for everything. And if in your house he does, then even Santa and his elves must put in a lot of hard work into earning the money needed to provide those lovely presents.

Here’s a fun approach:

Budget Talk, Kid Style: Sit down with your kid to talk about the things on their list, including which they want most and why. Discuss the realities of what each item costs and what that means for your family’s budget. Help them understand what a budget is and when and why it is helpful.
Make it real and fun: Say you’ve got £300 to spend on gifts for the family. Show your kids how that breaks down. Let them practice choosing which gifts fit into the budget — it’s like a holiday puzzle.
Even if they aren’t at the age yet where they can do that math, they’ll understand the concept of sharing with their siblings and other members of the family.
Top-3-Picks Game: Have them narrow their list down to their top three wishes. Then, surprise them with one or two on the big day. Less stress for you, more gratitude from them and a good lesson for later in the long run.

A Gift That Keeps Giving: Financial Education and Independence

Want to play the long game? Consider gifting your kid a small, regular allowance. This way they can begin earning, saving, and developing responsible money habits. Once they have money of their own, they’ll understand the necessity of budgeting, and in turn, understand why getting multiple presents at Christmas every year may be unrealistic.

How it works:

Set chores = earnings (dishes = £1, trash = £1.50, feeding the rabbit = priceless).
Pay weekly, so they see the cause-and-effect in action.
Make the conversation with your child a collaborative one where you jointly come up with ideas and parameters that they feel are fair, as well.

Why not gift them a children’s savings account?

Another way to support your child’s financial journey this festive season is to open a savings account for and with them. Plant the metaphorical money tree by explaining interest like growing a garden: save the seeds, water them (deposit regularly), and watch them grow. They’ll be saving for that high-ticket wish list item in no time.

There are, of course, a variety savings accounts for children (for some options, have a look here or here). It’s a great way to begin explaining to your child how a bank works, how interest rates and interest payments work, and also how they can deposit and withdraw funds as needed.

Let Them Own It

You’ll be thinking: what sorts of things should they withdraw the money for?

Here’s the deal: once it’s their money, let them call the shots. A huge part of the learning curve is the autonomy that comes with decision making about saving and spending. While your guidance is crucial, ultimately, they should be able to use their money as they see fit. Yes, they’ll make mistakes (probably spend half their savings on something ridiculous), but who ever really learned anything without making mistakes along the way?

The holidays are stressful enough without gift-induced guilt trips. So, take a deep breath, sip some cocoa, and use this season to teach your kids something priceless: how to manage money.

And hey, if all else fails, you can always blame Santa for not delivering that giant inflatable unicorn. 😉

Need help thinking through you festive budget - check out Ask Aila Anything and if you’re keen to get a handle on your budget and finances try Aila now.

Thank you to Caroline Teare for contributing this blog. 🫶💫

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