Gift giving for kids: Make holiday savings fun with this challenge

Providing incentives to save can help kids experience the power of saving to help them meet their goals.

By: The Family Money Team

10.21.2021

3 minute read

Gamifying the Gifts: The Holidays Savings Challenge

Many parents would like to inspire their kids to focus as much on giving as on receiving. And now is the perfect time to start.         

Key Points:

  • Start by talking about gift giving
  • Create an allowance plan
  • Incentivize by matching funds     
  • Outline the rules in writing with the three C’s     

Take young Laurie, for example. At the age of 11, she began privately holding meetings with her younger sisters the day after their parent's anniversary, to plan the next year’s gift. Laurie would call local stores to find the best price for the gift they chose, then divide that amount by 52 to determine how much they needed to save each week. She prorated each sister’s share based on their weekly allowance. By the time the sisters were 15, 11, and 8, they’d saved $800 over two years to send their parents on a five-day, off-season trip to the Bahamas—including airfare and hotel. 

Many parents would like their kids to experience the same excitement about gift giving versus just receiving. Caregivers can encourage and empower kids to start saving allowance money and earnings from chores or side gigs, so they can afford gifts for family and friends all year long. And with a matching gift as a motivation to save, they’ll be incentivized to save more. Here’s a plan to help you get started.

Talk about gift giving     

Start with a conversation and explain, “We love gift giving, and we want you to feel the joy of giving, too. So we’re going to help you plan and save so you can give holiday gifts.” Ask your child to name two people to put on their gift giving list: siblings, parents, grandparents, friends, or perhaps a charity of their choice.

Make an allowance plan

With allowances generally ranging between $1 to $2 per year of age, tweens and teens have the means, if not always the discipline to save a bundle. Accruing $100 by late December might be painless for 14-year-olds whose weekly allowances are bigger. But that goal might be out of reach for 8-year-olds who earn much less. Suggest choices based on your family’s circumstances and choose smaller dollar amounts, or limit the recipient list. For instance, perhaps kids can plan to buy one gift for both parents, one for siblings to share, or one for each set of grandparents. At some point, some kids may balk, arguing, “It’s my money!” Here’s where goals and incentives can counter such resistance. 

Set a financial goal

Brainstorm with your kids to figure out meaningful, but inexpensive gifts for each person on their list. If each little giver has 2 recipients and they budget $10 per gift, they’d need to save $20. 

Create a gift list

List the practical and fun gifts that cost $10 or less: a scarf, hat, gloves, socks; a mug with the recipients’ favorite colors, designs or film or TV characters; a book, necklace, or earrings; a drawing pad with colored pens or pencils; or a journaling notebook.

With a matching gift, kids will be incentivized

Offer incentives, such as a matching gift 

For instance, you can chip in 50 cents, or more, or less, for each dollar the children set aside for their holiday savings. The key, as with most parenting techniques, is to provide clarity, consistency, and consequences, in case the kids get off track. 

Outline the rules in writing with the three C’s:

  1. Clarity: Explain that you will match whatever amount you choose for each dollar they save in a given month. 
  2. Consistency: Keep careful track (or if your children are old enough, have them do so) with a simple chart, like this hypothetical example below.
  3. Consequences: Allowing kids to make mistakes and experience consequences helps them learn. So when and if they spend some of what they planned to save in a given month, explain that you will stop matching contributions until they replace what they spent.

Matching grant table gift giving

Motivating and helping children to make goals and stick to strategies for meeting those goals will not only help them experience the joy of gift giving, it will also help them develop discipline and desire to become good lifetime savers. And that’s a gift that keeps giving!

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