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Should There Be Limits On How Children Spend Holiday Gift Money?


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Parenting is hard work. It seems there are no limits to disagreements over what to wear, how much screen time to allow, sibling rivalries, and so on.

There are also the holidays, which adds additional stress to your life. It is likely that your children will receive money from relatives and friends. There may even be disagreement over how to spend it.

This can become a very contentious topic. Do children need to be allowed to choose how they spend their money?  Can a parent offer support and guidance?  Are purchases necessary to be discussed with the parent?  Money experts were asked to comment on this topic.

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Enjoy the moment with your child

Learn how the age factor affects decision making

Rebbell says that the key to understanding gift money is to keep in mind the age of the child, their maturity, and the level of interest. 

According to her, “Before you launch into a lesson on money, it may be a good idea to ask your children questions to determine where they are at so that you can adapt the conversation.”

A little guidance is more beneficial for younger children. Rebell says, “You could ask them to give part to charity for other children, particularly if they get a lot of money.”

She says it is okay to remind them about a long-term goal, if they don’t want to spend all of their money right away. 

Although parents may be tempted to take over, it is important that your children have the freedom to choose how they spend their money. 

Rebell says, “It is also important not to think that every gift must be a lesson and that holiday season especially, it’s okay to let kids enjoy the excitement of a splurge!”

Rebell advises teens to ask their parents about their goals and to gently suggest some suggestions. Rebell also suggests giving them guidance and recommendations on how to spend the money.

Accept that they will make mistakes as part of the learning process

Parents might be willing to let their children make bad choices, and that can also prove to be an educational experience. 

Amy Morin (a psychotherapist, author, and co-author of “The Arcade”), says that this could mean they have to spend their entire gift money within five minutes.13 Things Strong Kids Do: Think Big, Feel Good, Act Brave.“That could help them understand a bit more about future saving.

Rebell says that giving your children the freedom to make mistakes and spend as they please is a way to allow them to learn.

She says, “Eventually, your children will be able to decide their own spending habits. Even if they make mistakes or regret some of them,” It is best to support them, and not judge, if they make mistakes. Rebell states, “Let them know that everyone makes mistakes with money. The most important thing to do is own them so that you can learn from them and make better decisions next time.”

Be aware of the possible requirements

You can enjoy the first-row seat to see your child learn and grow.

All of us have had a challenging year. It’s been an emotional time, and it is refreshing to see a shift towards personal freedom. Melanie Musson (mother of five) and finance expert says, “Ultimately the money belongs to your child. They should be allowed the final decision.”

She suggests that parents still have a discussion about how to manage money, save, long-term and short-term value, and avoid frivolous spending.

After giving guidance, you can listen to your children.

Musson suggests that parents could ask their kids to write down the items they want to purchase. Help them determine a reasonable price for each item. Let them know if their budget is more than they can afford to spend.

Musson advises that you ask your child to think about the matter for three days. Musson continues, “They may be amazed at how much their minds change in three days.” The exercise will teach kids how to avoid spending impulsively and can be used throughout their life.

Editorial note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.