December 17, 2007 Holiday shopping provides more than an opportunity to teach children about giving, it is also a great time for parents to share lessons on fiscal responsibility. A leader in financial education, Maine's credit unions are encouraging parents to have their children participate in the holiday shopping experience, from making a list to explaining about sales and coupons.
Studies indicate that parents who encourage their children to participate in shopping for the holidays provide their children with an opportunity to gain valuable experience in how money works and are more likely to develop strong money management skills.
To help parents involve children in holiday shopping and thus become familiar with the financial aspect of the process, the Maine Credit Union League, in cooperation with the Credit Union National Association (CUNA), is providing its annual list of holiday shopping tips for kids.
John Murphy, President of the Maine Credit Union League, explained that sharing this information is important, as figures indicate that teens spend more than $170 billion a year, yet fewer than half know the basics about credit, checking, savings accounts, or auto insurance. Helping children gain a better understanding of money management at an early age can help avoid significant financial challenges and issues when they grow up.
"Starting a dialogue at an early age can pay dividends as children get older. Through youth savings programs and holiday club accounts, the number of Maine children participating in a Christmas or Holiday Club Account continues to rise. Developing good saving and spending habits at an early age will help kids become financially smart consumers as adults and Maine's credit unions believe that holiday shopping is a good place to facilitate this learning," he said.
Murphy added that even if children are very young, eventually they will be purchasing gifts for their families during the holiday season. Taking time to explain how the gift buying process works, such as how to make a shopping list, how to decide which items to buy and how to set spending limits. "When children see their parents using money wisely, they are much more likely to be wiser when they have money," he said.
Maine's credit unions have taken a leading role in youth financial literacy in the state. For the past six years, the League has received a national Desjardins Award for its efforts in youth financial literacy. As part of this effort, Maine's credit unions and CUNA suggest the following ideas for kids regarding holiday gift spending and shopping:
- Using their list of gifts and costs, kids should determine how much they need to save weekly in order to purchase all the gifts on their lists. Put a little cash away each time they receive their allowance.
- Earn money by asking their parents and neighbors what tasks they would be willing to pay them to do, such as shoveling snow, mowing lawns or raking leaves. And if they're old enough, a part-time, after-school job may be an option.
- Shop sales. Most stores will run sales on items during the holiday season.
- Be smart about gift cards. While they are handy and convenient to give and receive, it is important to remember that they are like cash-- if you lose it, it's gone.
- Teach them how to comparison shop: You can easily save more than 10 percent on most items, sometimes considerably more, by comparing prices at different stores. Help them fight the urge to buy the first item they see.
- Shop wisely on-line: With the increasing popularity of online shopping, parents should not only monitor the purchases that their children make online but actually walk their children through the online purchasing process and make them aware of things to look for in making a secure and safe online purchase. Some of these tips include telling a child how to be sure when purchasing online that they are doing so from a secure site - look for "https" in the website address, and the locked padlock icon on the toolbar.
- Whether you are shopping online or in a store, make sure you understand the business' return policy.
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