Founder and Clinical Director Matt Lundquist on Talking to Kids About Money Values and Holiday Spending in HerMoney

Most families spend money during the holidays well out of proportion with other times of the year. For many families, that’s a fine economic choice, but holiday presents can seem almost mystical to kids. How can parents teach kids about money values and spending, especially around Christmas and Hanukkah? Our Founder and Clinical Director Matt Lundquist weighs in on talking to children about cost and relieving fear or guilt about asking for holiday gifts in HerMoney.

“Managing Christmas Expectations: How to Explain Value (and Values) to Kids” centers around writer Melanie Brooks’ personal experience with her 8-year-old son Ian who requested a Nintendo Switch for Christmas, a pricey present but within his family’s budget. Though initially asking for that present even if it was his only gift this year, Ian began to reconsider out of concern and guilt that it was too expensive for his family (“That’s an impossible gift, Mom…I’m just saving up my own money to get one”). 

While there are some things present in Ian’s response that are harder to teach like the scale of money involved and understanding that his needs and wants are part of a broader set of family needs and wants, Matt encourages Brooks and other parents in similar circumstances to have conversations with their children about holiday spending. Matt explains, “Talking to kids about what things cost is important for a few reasons…One, of course, is so that they can develop an understanding of economic principles like opportunity cost (if I buy this, I can’t buy that), scarcity (there are only so many things I can buy), and also to simply get a sense of what different kinds of things cost.”

Especially with kids like Ian who may need some help to understand well-reasoned decisions to buy a gift in order to be able to enjoy it, Matt encourages having several conversations. This includes discussing how the family prioritizes Christmas economically, the ways they’ve saved (or otherwise budgeted) for this event, and that they’re always going to make sure good decisions are made so that the family can be secure and everyone can share in enjoying nice things from time to time. 

It’s also worth noting, beyond the scope of the article, that parents need to factor in a few things when explaining these ideas at an 8-year-old level. Of course, parents need to break ideas down and use language that’s accessible (kids don’t need to know the words “opportunity cost”). It’s also important to recognize the limit of what a child can understand about what a certain amount of money means (and how much parents are ready to share) relative to the family budget and the special value placed on holiday spending.

In our financial family therapy, we talk to parents sometimes about how the messaging of “things don’t matter, people do” can be confusing for kids, as well as attempts to teach something that really isn’t true. The concern we have as socially aware parents is the over-focus on consumer goods and balancing the value of material things with meaningful connection, not that things are bad per se. Some things are pretty essential and even things that aren’t can be quite special.