Holiday Money Lessons for Children: 3 Tips for Parents

The holidays are an excellent time to teach children - especially the very young - about money.

The money lessons we learn in childhood follow us into adulthood - so ingraining good money habits into children early is not only wise, it's practically every parent's duty.

Before we delve into money lessons for the very young, let's look at some holiday spending facts - and parse the lessons from this data first.

How Much Do Americans Spend During the Holiday Season?

According to the National Retail Federation (NRF) Americans spent a whopping $457.4 billion on Christmas gifts in 2006. That's approximately $1,052 for every American (there are an estimated 300 million of us).

I don't know about you, but that seems a bit exorbitant to me. I wonder how many cringe when the see the credit card bills roll in in January?

Taking this into account, following are some holiday money lessons for the very young.

1. Spend within Your Means: A great tool for teaching kids this lesson is the Discovery ATM Machine. What is this?

It teaches kids about money. As one testimonial on the shopping channel proclaimed, "The ATM encourage[s] kids to save at home until they reach a financial goal and will be able to deposit their money into a "real" bank."

The machine has the following features as outlined in the description on the above-linked site:

**Accepts real bills and coins
**Dispenses cash like a real ATM
**Enter secret PIN number for access
**Make deposits and withdrawals
**Keeps running total of savings
**Electronic bill feeder
**Coin recognition

Think what a first-hand lesson like working for money, depositing it and then withdrawing only what you have in there can teach kids for the future.

2. Work for Your Money: The aforementioned machine can also teach kids about the value of working for money. Eg, you can only get out of the ATM machine what you put in. And, getting money to put in requires work.

Using the time-honored method of paying kids to do chores around the house can easily accomplish this. At the end of the week, give them their "pay" and have them deposit it into the bank.