How introduce your kids to the spend, save, give system

There's no better time than the festive season and the new year to build your kids' financial skills.

There are opportunities to involve them in the planning and budgeting for gifts and holidays. It is a perfect time for them to pick up a holiday job or earn money from chores, and for you to share the spend, save, give system.

But, most importantly, it is time to review their pocket money and what they must do to earn one, as well as setting their saving and giving goals for the year ahead.

Spending

It is an expensive time of year and it's easy to go overboard with your kids' presents. It is great fun to watch their excitement on Christmas Day but I'll never forget when my then four-year-old daughter said "too many presents".

It was a wake-up call. If your kids are old enough, involve them in the planning and budgeting.

Can they help find the best prices for holidays and gifts? Do they understand that if they ask for fashion goods for Christmas that they will most likely be on sale on Boxing Day? Point out to your teenagers that if you give them money or gift cards, it will go much further at the sales.

Review and save

It is an ideal time to make resolutions about spending, saving and giving. Talk about their allowance and savings goals for the year ahead.

Does their allowance require some tweaking? Do you tie the money to chores or give it with the expectation that they will keep their room tidy and help with tasks such as setting the table? Should you increase it so that they buy their own clothes and birthday presents? How much do you pay for other jobs such as mowing the grass or ironing or gardening?

Saving 25% of their allowance for long-term goals such as travel when they finish school and 25% for short-term savings for consumer goods will help develop healthy money habits.

Giving

My kids are good at receiving presents and I am working on their giving skills. My advice is to encourage your offspring to buy presents for other members of the family.

They can either use their own money - perhaps from chores -to spend on presents or you can give them a present budget. Encourage them to be creative with their money by putting a limit on the amount they spend.

Giving to disadvantaged people can also be a focus for the whole family. Involve your kids in the choice of charity and encourage them to give small regular amounts.

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