Teach Kids About Money During the Holidays: The Spend, Save, Give Buckets
If you have kids or grandkids, or even nieces or nephews, you’ve likely searched long and hard for the perfect gift. But now that the holiday countdown is on, it’s worth admitting that many kids would rather get cash than another gift.
You have a simple chance to teach the idea we talk about at Apprise. Money is a tool to support a life that fits your values. That’s why I like this time of year as a simple way to teach kids about money during the holidays.
But before your gift gets converted into apps, games, or clothes, there’s an opportunity to show your children how to get more from their money than just more stuff.
After you have recycled all the wrapping paper and poured the hot cocoa, explain to your kids how dividing their cash into three buckets can help them enjoy their money today while also laying the groundwork for future financial success.
Think of these buckets as a simple way to turn cash into choices. Choices that can improve your Return on Your Life (ROL) now and later. Here’s a simple framework that keeps it practical and values-based.
The Spend, Save, Give Buckets
1. The Spend Bucket
Start by explaining to your child that there are three ways that they can use their money: spending on themselves, saving (or investing) for the future, or helping other people. Consider saving your speech on taxes, utilities, and the costs of parenting for another day.
Next, establish a “bucket” for each use. Ask your child, “What do you want this money to do for you?” Even a one-word answer is a good start.
Collect your child’s cash gifts and anything rattling around in their piggy bank, and decide on a simple split of how much goes into each bucket from now on. You don’t have to set the split in stone. You can adjust it as they learn.
Younger kids who want that new toy or need a new pair of soccer cleats might put a little more into the Spend bucket, especially around the holidays. But you can also talk to your older kids about the value of spending their money on experiences rather than buying more stuff. Will they really play that new game, or wear that new sweatshirt before they grow out of it? Or would they get a little more bang for their buck buying tickets to a concert or a sports event? Thinking this way can help kids learn the difference between buying more stuff and buying more memories. It’s a great example of how you can improve your ROL.
2. The Saving/Investing Bucket
The earlier kids learn to put their money to work for them, the earlier they’ll be able to harness the power of compounding over time.
But that lesson might be a bit too much for younger kids. For now, just telling them that part of their money is going “in the bank” so that it can “get bigger” might be enough.
For older kids who already have a savings account, you might consider opening a custodial brokerage account and introducing them to investing. In that account, they could choose to buy a few shares of a handful of recognizable companies. For my kids, owning shares of companies they know makes them more interested in following and learning more about them. Plus, it can help them experience what it feels like when values go up and down. Remember that the goal isn’t to “beat the market.” It’s to help them build calm habits and basic financial confidence.
You could also split this bucket between a new brokerage account and a new savings account so that they can compare how each account grows over time.
Teenagers might consider contributing to a 529 account to help pay for their education. And if they’re earning W-2 income from a part-time job or working as a self-employed babysitter or landscaper, you can also help them open a custodial Roth IRA. You can read this blog, Roth IRA Benefits for Kids, to learn more about the advantages of helping your child open a Roth IRA. Don’t forget that to fund a Roth IRA, contributions generally can’t exceed their earned income.
3. The Giving Bucket
Learning to look beyond their own wants and needs can be one of the most challenging lessons children can learn. Modeling generosity by making giving part of your financial plan and by talking to your kids about your family’s values can be a strong place to start.
As they grow older and become more aware of the world around them, point your kids toward charities and nonprofits that might align with their interests.
Importantly, giving can be money or time. Athletes might like to contribute to teams that support underprivileged kids. Avid readers might enjoy supporting literacy programs. Animal lovers might want to give to their local shelter. Eventually, kids might even want to supplement their giving with volunteer shifts.
Showing your kids that there’s more to managing money than just buying stuff will be a valuable lesson. It will also empower them to use their money to improve their lives and their communities. It can turn holiday cash into a lesson that’s about more than the gifts we receive.
Final Thoughts
And the same framework applies to adults. You can use it in your own situation. Doing so can help you align how you use your Time, Energy, Attention, and Money (TEAM) with what matters most, and identify small habits to improve your life when you face a new beginning. You can use the same buckets to increase your ROL as you step into a new chapter.
And if you want to adjust your own “buckets” as you prepare for a New Year, schedule a call and let’s start planning how to make the next chapter of your life more fulfilling. A brief check-in can make next year feel much more intentional.
If you’re not ready for a conversation, you can also subscribe to our blog to receive our weekly insights in your inbox.
I would like to wish all readers a wonderful holiday, filled with plenty of time for family and friends.
FAQ: Teach Kids About Money During the Holidays
1) What’s a good starting split for the Spend, Save, Give buckets?
There’s no perfect formula. The goal is to give the money a purpose, not to create a rigid rule. For younger kids, it’s normal for the Spend bucket to be larger, especially around the holidays. For older kids and teens, you can gradually increase the Saving or Investing bucket as their goals expand. Start with a simple split that feels realistic, then revisit it after a few weeks to see what’s working.
2) How do I teach this without turning it into a lecture or a power struggle?
Keep it short and collaborative. Ask one question. “What do you want this money to do for you?” Let them answer, even if it’s just one word. Then give two or three options and let them choose within boundaries you’re comfortable with. You can also make this a 10-minute conversation you revisit a few times, rather than trying to cover everything at once.
3) When does it make sense to introduce investing, and what’s a simple first step?
Investing makes more sense once a child can tolerate ups and downs without panicking. For some kids, that’s early, for others it’s later. A simple first step is to connect investing to something familiar, like owning a small piece of a company they recognize, and then watching what happens over time. Focus on what they’re learning—patience, discipline, and staying calm—not on trying to “beat the market.”
4) Can a teen contribute to a Roth IRA, and what rules matter most?
Yes, if they have earned income. That can be W-2 wages from a job or documented self-employment income, such as babysitting or yard work. The key rule is that contributions generally can’t exceed what they earned for the year. A custodial Roth IRA can be a great teaching tool, but it’s worth keeping good records so contributions stay aligned with earnings.
This Week’s Favorite Reads:
This week, we share articles offering tips on spending money, non-financial lessons from Warren Buffett, and asset location. You will also find an article discussing finding love again after losing a spouse, and another article discussing 10 things you should know about estate planning.
Here are the links to this week’s articles, as well as a brief description of each and why you should check it out:
1. A $100,000 new car won’t make you happy—here’s what will, says expert on psychology of money.
When asked to recommend a book about money, I typically recommend “The Psychology of Money,” by Morgan Housel, which I wrote about in this blog post. I’m currently reading Housel’s latest book, “The Art of Spending Money.” It might be even better. In this article, Housel argues that big-ticket purchases, like a $100,000 car, rarely deliver lasting happiness because our brains don’t actually want “stuff.” They want dopamine, the chemical of desire that craves novelty and the anticipation of getting something new. That’s why wanting what you can’t have can feel more intense than enjoying what you already own, and why the ladder never ends. Each upgrade resets the baseline and creates a new “what’s next?” Housel’s alternative is simple and powerful: wanting less can improve well-being as much as earning more, and it’s a game you can actually win. Narrowing the gap between what you have and what you want can lead to greater contentment.
2. 10 Things We Can Learn From Warren Buffett That Have Nothing to Do With Money.
This article offers a Thanksgiving-themed reflection on Warren Buffett, focusing on life lessons rather than investing. Using Buffett’s retirement at the end of 2025 as the backdrop, he pulls 10 virtues worth carrying into any new chapter: kindness, integrity, patience, caution and preparedness, optimism, independent thinking, humility, contentment, continuity, and gratitude. The column focuses on Buffett’s memorable aphorisms and the idea that character compounds, just as money does. Several points feel especially timely around the holidays. Slow down, act with decency, avoid envy, and build “margin of safety” in your life so you are not forced into rushed decisions. Even for readers who aren’t interested in markets, it’s a practical reminder that a well-lived life is shaped less by big moments and more by steady habits practiced over time. I have appreciated the life lessons that Buffett shared during Berkshire Hathaway’s annual meetings. I highlighted some of them in Reflections on a Journey to Omaha.
3. Asset Location: A Tax-Aware Investment Strategy.
This article discusses why asset location matters. Asset location focuses on which type of account holds which investments, not the mix of investments itself (that’s asset allocation). Because taxable, tax-deferred, and Roth accounts treat interest, dividends, and gains differently, smart placement can reduce “tax drag” and improve after-tax results without cutting retirement spending. The authors use bond funds as a simple example: holding them in a tax-deferred account can avoid annual taxation on distributions, allowing more compounding. They also emphasize that asset allocation still comes first, and that asset location usually needs only periodic reviews as income, tax rules, and goals evolve. For a deeper dive, see my Apprise post, “Asset Location for Tax Efficiency.”
4. After Loss, Love Again.
Widowhood can open the door to a new chapter. But as Kathleen Rehl shares from personal experience, loving again later in life often comes with financial complexity. She notes that money conflicts can create more relationship tension than many couples expect, and she highlights research suggesting nearly one-quarter of widows eventually re-partner. Her core message is to slow down, talk honestly, and not forget to address the “money questions.” She offers 10 practical prompts, from how to share expenses and where you’ll live, to retirement goals, debt differences, healthcare costs, family obligations, and whether a cohabitation or prenuptial agreement makes sense. She closes with a gentle approach: short, relaxed conversations over time that build clarity, trust, and compatibility.
5. 10 Things You Should Know About Estate Planning.
Even though we know it’s important, many of us avoid talking about estate planning or updating our wills. Some of us don’t want to address the day we’re no longer around. Others think only the wealthy need to do estate planning. This checklist argues estate planning is about protecting what you’ve built and sparing loved ones stress, not just something for the wealthy. It explains that planning covers life and death decisions: who manages finances if you’re incapacitated, who makes healthcare calls, and how assets pass at death. Beyond a will, it highlights financial and healthcare powers of attorney and advance directives. It stresses that beneficiary designations on retirement accounts and life insurance override your will, so keeping them current is crucial. It notes that trusts and transfer-on-death designations can speed inheritances and reduce probate friction. It also reminds readers to plan for pets and digital accounts, choose help thoughtfully (lawyer vs online tools), and review documents every few years or after significant life changes. This article reminds you to inform family members and close friends about your estate plan, too.
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