The Gift That Keeps Giving: Teaching Financial Literacy During the Holidays

By Charles Welsh, CFP® – Wealth Management Advisor

The holiday season is a wonderful time for family, celebration, and giving. It’s also an ideal time to share the lifelong benefits of saving and investing. Perhaps your family has benefited from savings by your parents or grandparents through inheritance. Sharing the legacy of family savings is a great way to honor family members that have passed and reinforce family gratitude. A family legacy of saving combined with personal finance concepts is the holiday gift that truly keeps on giving.

Here are some effective and engaging ways to bring financial literacy into holiday traditions this year.

1. Introduce Basic Budgeting Concepts with Holiday Shopping

One of the simplest ways to teach kids about money is through holiday shopping. Involve children or teens in creating a budget for holiday gifts, showing them how to set spending limits based on what they have available. Use this as a chance to discuss the importance of making good choices and trade-offs to stay within budget.

It’s also a perfect time to suggest personal gifts that may be crafted for no cost and perhaps be more meaningful. For older children, apps like Greenlight offer kid-friendly tools for budgeting and tracking spending, making the process more interactive.

2. Teach Saving Instead of Spending

For children of all ages consider a savings or investment account as a holiday gift. If children have earned income, a gift up to their income amount of $7,000 (in 2024) could be used to set up a tax preferred Roth account and grow tax free forever. Investment accounts that grow over time teach the benefits of compound interest. An investment account set up this year could potentially support more impactful gift giving in the future.

3. Watch as Investments Grow

When children have excess savings consider opening a custodial investment account. A parent or guardian will need to be on the account until age 18 but this is a terrific way for a teenager to gain knowledge about investing. Low-cost ETFs offer a good way to diversify and achieve broad exposure. Adding a couple individual stocks associated to products your children use adds additional interest to tracking portfolio growth. Who knows, your children may know the next Meta or Nvida and pick the ideal investment for the next decade.

4. Teach Goal Setting and Delayed Gratification

The holidays can also be a time to teach goal setting and the value of patience. Reviewing past investments at the end of the year is a great way to recognize the value of saving/investing overtime. This lesson in delayed gratification can be incredibly valuable, helping children understand that financial goals require time, patience, and dedication. This is a lesson that transcends investing and is true about most good things we accomplish in life.

5. Share Stories and Encourage Open Conversations

Financial literacy often starts with open family conversations. Share stories of your own experiences—both successes and mistakes. Financial failures and lessons learned from failing (and recovering) may be the most relatable. Equally important is to discuss how good financial habits positively impact personal relationships and mental health.

A Lifelong Gift of Financial Confidence

Teaching financial literacy doesn’t have to be complicated. Through simple activities and conversations, you can provide young family members with foundational knowledge that will grow with them. By using the holiday season as a springboard for these lessons, you give them a gift that will serve them well for years to come—financial confidence and the skills to build a secure future.