‘Tis the season…

The tinsel is strewn and the Christmas lights are up EVERYWHERE. The holidays are fast approaching and expectations are running quite high with children and what gifts they’ll be getting.

There is nothing better than giving presents to children. The excitement and shear joy they experience with gifts is quite special. But, if your household is anything like mine, they already have more than enough.

If you are brave, and are willing to face the tears and heartache, consider not buying them gifts this year. Or rather, consider gifts of a different kind. How about an investment voucher? We’ll call it the i-voucher. You really can go to town with this one. Type and print it out and present it to them in exactly the same way you’d present a gift card – in a little envelope or small gift box tied with a ribbon. Here comes the hard part. You have to explain to them what it is and why you’re giving them this i-voucher instead of the latest X-box or Barbie doll.

Our responsibility to our children is the provision of a roof over their heads, food, education, a safe and loving home environment etc. It’s also really ok to spoil them occasionally but if you really want to prepare them for the future, teach them healthy money habits. Now is the best time to start.

For younger children (below the age of 7), perhaps a piggy bank would work better. At this age, they need a visual representation of money. Let them know that the money you give them now over the holidays is a gift. Beyond this point, consider getting them to earn it, no matter how trivial the chores may seem. They need to learn about the relationship between effort and financial reward especially during the holidays when they have more idle time. For older children, the i-voucher could work very well.

There are three important points you need to try and get across to them with this exercise.

  • They need money to be invested for the future
    • Help them dream and write down all the things they’d like to get when they are older – travel, property, a car etc.
    • Open an investment account in their name and track the performance with them. Show them how their money is growing over time and how satisfying it will be when they eventually get to spend it.
    • Delayed gratification is all about discipline – a super important lesson to teach children (and adults!)
  • They need money to spend on items they really want in the short term – ice cream, toys, movie tickets or even that X-box.
  • They need money to share with others (be it siblings, friends or people less fortunate than them.
    • This you’ll have to enforce and explain the importance of giving
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