When teens have saved up some cash or received money for Christmas, how can parents help guide them through responsible money management? This is a great time of year to teach money lessons that could stick for a lifetime.

The festive season is a time where many of us shop till we drop! From decorations and gifts to new clothes and food, it’s easy to get caught up in the frenzy of Christmas holiday spending. The holiday season certainly doesn’t always come cheap.

This time of year can also be tough on teenagers who are at the start of becoming financially independent. So, how can teens spend responsibly while still enjoying the festive period?

Ways to help teens spend wisely during the festive season

Spending wisely while still enjoying the festivities can be tricky, and holiday spending can be a tough bill to face in the new year. So, here are some tips to help get teens through the season with their wallets intact.

Planning ahead 

When the Christmas holidays come around, teenagers usually have a million requests to buy things that they won't use or need. So, the first step to spending responsibly is to plan. 

Teens can set up a list of things they want to do and buy. As a parent, you can help them go through the list. Teens should ask themselves questions like ‘Do I really need this?'. Doing this can help them make reasonable decisions about their purchases. This way of thinking is important not just at Christmas but year-round. It teaches responsibility and helps teens stay on budget over the long term.

Setting up a budget

While you may have your budget under control, your teen may have no idea where to start with managing their holiday budget. Studies show that 36% of teens admit they have trouble sticking to their budget in the past. Therefore, it's important to set up a detailed budget that is realistic and easy to follow. 

Firstly, teens should consider how much money they have to spend. This will give them an overall idea of where to allocate money within their budget. Teens should also ask ‘How much am I willing to spend on each point?’. Allocating money to specific activities and items can help teens plan ahead and not spend their money all at once. 

Making a Christmas gift list

Teens should ideally make a list of the people they want to buy gifts for, and what gifts they want to buy. They can then look at the amount they want to spend on each gift. 

Next, they can try to lower the amount per person to see if they can reduce the total amount spent within their limits. This can be tweaked over time, but it is important to get an overall idea of how much money will be spent on gifts. 

For teens, there are many gift options: they can buy something new, recycle something valuable or make something at home! Some DIY gift options include: 

• Framed photos 
• Jewellery 
• Baked cupcakes 
• Magnets 
• Candles 

It's a great idea to let your teenager know that DIY gifts are just as precious as new gifts and often even more special to the recipients. 

Keeping track of spending

Once the holidays come around, it is necessary for teens to carefully keep track of their spending. They can keep a notebook or use a mobile app to document every time they spend money. This allows them to see where they've stayed within budget and where they've overspent. In turn, they can make adjustments to their initial budget. 

An example of a budget tracking mobile app is Cashee :)

Teaching the risks of holiday promotions 

Once the Christmas specials start rolling out, it's easy to get caught up in the hype. It's crucial for teenagers to know that not all promotions or specials are worth it. Teens should be encouraged to do some research around the costs of certain products throughout the year to see if a special is real or simply too good to be true. 

Talking to your teen

For teens, money is synonymous with freedom, so being told what to do with it is not a pleasant experience. By keeping this in mind, it will make it simpler to guide teens as they learn valuable money skills.

The best time to talk to teens about money is when everyone is in a good mood, and they are not busy with anything. It's a good idea to start off by offering guidance in helping them to do everything they want to do with the money they have available. 

When talking to teens, you could also offer ideas for how they can save money. These ideas can include: 

• Hanging out with friends instead of shopping
• Avoiding gift buying until closer to Christmas when prices are usually cheaper
• Inviting friends over for food and drinks at home instead of going out 
• Writing cards instead of buying gifts 
• Shopping around for specials on their most-wanted items 
• Enjoying free festive events instead of paying for experiences

Allow teens to enjoy the holidays 

While it is important for teens to learn about holiday spending, it's also essential for them to enjoy the time and do the things they like. If it's all about saving and budgeting, teens can become anxious and stressed. Therefore, it's crucial to bring in an element of fun during the planning and money tracking steps. Encourage them in a positive way throughout the process but also praise them when they succeed. And when they make mistakes, help them learn from the experience and then move on. 

Learning from holiday spending

Thankfully, the teenage years come with few financial responsibilities. However, that doesn't mean that teens can simply spend without taking caution. It is also during these years that teens form money habits that are carried over into adulthood. Teens must have the opportunity to use money to learn how to manage it. With the right help, holiday spending is like a quick course for teens in budgeting, planning, putting goals in place, and handling the consequences of any financial decisions made.