Holiday spending gives parents a chance to teach

MADISON (10/14/9)--Entertainment is an important item for the family budget, even (and perhaps especially) in hard economic times. Holidays popular with children can be a good opportunity for you to model sound money management while rewarding and renewing family bonds.

This holiday season, besides having a good time with your children, treat them to some painless budgeting lessons.

Here are some ideas that also can work for other special events such as vacations from Philip Heckman, of the Center for Personal Finance at the Credit Union National Association.

Include your children in spending decisions. Decide the total amount you can afford to spend on the event. Then ask your children to help you decide how much can go for presents, food, souvenirs and so on. Make it clear that you have the final vote, but by giving them a voice, they'll be more likely to accept spending limits.

Include your kids when shopping for supplies. Shopping consists of many tasks that are appropriate for children of different ages. For example, older children can help calculate what's needed for homemade decorations, search for coupons and compare prices. Younger children can help locate items in the store, hunting by picture if they can't read labels. This teaches what things cost and how to find cheaper alternatives.

Offer financial incentives. Allow your children to "go over budget" by spending their own savings for event extras. This teaches them to plan ahead and use limited resources wisely. It also gives them practice in making financial decisions that affect them directly. And if your kids help you come in under budget, split the surplus with them.

Include some free or low-cost activity. Telling stories around a candle or baking cookies demonstrates that it's not necessary to spend a lot of money to have fun. And when you repeat inexpensive activities year after year, they can become family traditions as well as some of your family's best lasting memories.