Should there be limits on how children spend holiday gift money?


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If you are a parent, the struggle is real. There is apparently no end to the disagreements: over what to wear, the appropriate amount of screen time, sibling rivalries and so on.

And then there’s the holidays and all those extra stressors, especially around gifts. Your children will likely receive money from friends and relatives, and there may be disputes as to how this money should be spent.

This can be a pretty sticky subject. Should children have the freedom to spend the money as they see fit? Should a parent step in and offer advice? Should we discuss purchases? We asked financial experts to comment on the subject.

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Let your child enjoy the moment

When your child opens the envelope and finds money, their mind is probably rushing to several different scenarios. They can browse their favorite stores, use the money to buy something they saw at a friend’s house, or they can direct the funds to something they saved up for.

When first receiving the money, financial experts encourage parents to allow their children to enjoy the excitement of receiving the money. Don’t immediately start speaking out about limitations or suggestions on how they should spend the gift. Instead, let them show their enthusiasm and then take the opportunity to start discussions about money.

“The gift of money is a wonderful way to open a discussion with your children about the value of money and to give them the real world experience of making choices, whether they choose to buy something that ‘they have their eye on, save it for a rainy day or invest it for the future “, says Rebel bobbi, CFP and personal finance expert at Tally, a debt repayment application.

Understand how age plays a role in decision making

One key thing to remember is that understanding the concept behind gift money will vary widely depending on the child’s age, maturity and level of interest, explains Rebbell.

“Before embarking on a money lesson, it may be a good idea to ask your child questions to gauge where they are at so you can tailor the discussion,” she says.

For example, with younger children, some advice makes more sense. “You might ask them to consider giving a share to charity for other children, especially if they are receiving a large sum of money,” Rebell continues.

And it’s good to remind them of a longer-term goal if they want to go out and spend it all right away, she says.

Even if parents want to intervene immediately, you need to give your children some freedom to decide how to spend their money.

“It’s also important to remember that not all giveaways have to be a lesson, especially during the holidays,” says Rebell. “It’s also good to let a child enjoy the thrill of madness!”

For tweens and teens, it is appropriate to inquire about their intentions and then kindly offer a few suggestions so that no strings are attached to the gift money, but also offer them recommendations and advice on how to make the gift. way they could spend it, says Rebell.

Recognize that mistakes are part of their growth process

Some parents may want to give their children a chance to make their own bad decisions, which can also be a learning experience.

“This can mean that if they spend all of their gift money the first five minutes they’re in the arcade, they don’t get any more money from you,” says Amy Morin, psychotherapist and author of.13 things strong kids do: think big, feel good, be brave.“” It might help them learn a bit more about saving in the future. “

Also keep in mind that allowing your kids to spend at their discretion is an opportunity to let your kids make mistakes in a low-stakes environment, says Rebell.

“Ultimately, your kids should learn to make their own spending decisions, even if that means making mistakes and potentially regretting certain spending decisions,” she says. If they do, the best strategy is to offer support, not judgment. “Tell them we all make money mistakes and the most important thing is owning it so you can learn from it and do better next time,” Rebell adds.

Realize that some settings may be needed

Guidelines are acceptable if they are based on family dynamics or the fundamentals of your personal parenting style. So if your family’s rules don’t call for violent video games or no TV in a bedroom, you can tell your kids that these types of purchases are not allowed.

“Of course, you’ll always want to have minimum rules for what they buy,” says Morin. “If, for example, you think they’re not ready for a phone, don’t allow them to spend their gift money on one.”

Morin also recommends seizing the opportunity and using the issue of gift money as an educational opportunity. “For example, you could save them 30% of their money and then let them spend the rest. The savings could be for college, a car, or just for the future,” she says.

If your kids don’t have a savings account in their name yet, this is a good opportunity to open one. Chase offers the Chase First BankingSM account exclusive to Chase customers who wish to open an account for their children aged 6 to 17. Your kids have access to a debit card and you don’t have to worry about monthly service charges.

Older children might be interested in the stock market, and a cash gift for the holidays will give them the opportunity to try their hand at investing. Consider opening an investment deposit account; the two Store and Schwab offer good options.

Take advantage of the front row seat to watch the child grow and learn

The past year and a half has been difficult for everyone, so a pivot to some personal freedom is a welcome change. “Ultimately, the money belongs to the child, and he should be allowed to make the final choice,” says Melanie Musson, mother of five and finance expert at

Still, parents should spend time discussing money management, savings, short- and long-term value, and frivolous spending, she says.

But after offering advice, listen to what your kids are saying.

“One strategy parents can use is to have their children write down what they would like to buy,” suggests Musson. “Then help them estimate a realistic price for each item. If their total is more than what they set aside to spend the money they offered, let them decide what to cut. “

Next, Musson recommends having your child think for three days. “They may be surprised how much they change their mind in three days,” she continues. “This exercise will help kids learn not to be impulsive when it comes to spending, and it’s a tactic they can use throughout their lives.”

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.


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