Money wrapped in a red bow

3 Ideas for How Kids Should Spend their Christmas Money

December 27, 2017 | White Rose Credit Union | Financial Wellness

If your child receives cash for Christmas this year, how can you help teach them responsible money management? Here are three ideas for how kids should spend their Christmas money. There are no right or wrong answers, and it’s important to let the final decision up to them. But this is a great time of year to teach money lessons that could stick with them for a lifetime.


Teach children the importance of saving money early! Take it one step farther and instead of placing that money in a piggy bank – put it into an actual bank account. Saving Christmas money in a dedicated savings account will teach your child the basics of banking, how to make smart decisions with their money, and will start developing healthy money habits that will last a lifetime.

Have your child create a savings goal for their new account. Is there something in particular they want to save for? Plan a savings strategy to meet that goal over the next year. Many financial institutions have savings accounts that cater to youth. At White Rose Credit Union, we call it the Sprout Account! Look for an account that has extra perks to make saving fun for your child. An added bonus of opening a credit union youth account is that your child will be a member of that credit union for life!


Why not? Even spending money can teach a valuable lesson to children. If a child never has to spend their own money, it’s difficult for them to grasp the concepts of wants vs needs, budgeting, prioritizing, and discovering the actual costs of products and services they use every day.

Encourage them to make a budget based on the amount of Christmas money they received. Then, have them make a list of all of the things they want to buy with that budget. Have them separate the items by wants vs. needs, and prioritize what they want the most on the entire list. Once they know what their first choice is, have them price compare at different stores to find the best deal. Once they finally make the purchase, they’ll have a much better understanding of responsible spending practices.

Use some of these worksheets to help your child through the exercises.

Spending Diary Worksheet

Wants vs. Needs Worksheet


As the holiday season winds down, so does charitable giving. In fact, 31% of total annual giving in the U.S. happens in December! After the holidays, many charities will be more in need than ever. Encourage your child to keep the holiday spirit alive throughout the entire year by using their gift money to give back.

Your child can be an active participant by picking the charity and the method of donation. Have them research and select a charity that resonates with them on one of these sites.

They can choose to either give money directly to the organization of their choice or buy an item with their money and donate that item to the organization. It can be as simple as shopping for dog food at the store, and then hand-delivering it to the local animal shelter.

Donating their Christmas money not only teaches valuable lessons in generosity, but also will make kids feel good. Time magazine even reports that giving is scientifically proven to make you happier.

If your child is reluctant to part with their gift money, encourage them to volunteer at a local charity instead!

Want more ideas?

Visit our Student & Youth Programs page to find more resources on how to teach money skills to today’s youth. Learn more about financial education now!


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