Santa’s Workshop: A Kids and Money Lesson Even Adults Could Benefit From

Last week my kids participated in a unique budgeting exercise at their school, carefully disguised as a Santa’s Workshop. The idea was the kids were to visit the workshop a few days in advance of its official opening to develop a shopping list for friends and family, along with a Christmas shopping budget.

Our daughter came home with a pretty good estimate of what she’d need to complete her shopping. $32, to be exact. Most impressive? That included gifts for five or six family members – even her little brother! We negotiated a small advance allowance along with a few extra chores to work on over the weekend and handed over some of the shopping cash.

That morning, the kids were allowed to visit Santa’s Workshop before classes started and were allowed to select a number of gifts up to their budgeted amount – not a penny more. Imagine if we shopped under such strict guidelines. Spend the cash you have available for Christmas and leave the store. No credit cards; no layaways; no 90 days same as cash.

As parents, we don’t have to wait for Santa’s Workshop to teach these same lessons. Rather than buying gifts for your kids to give to siblings and friends, give them a budget and allow them to do their own shopping (with your assistance, of course). Here are a few ideas to reinforce with kids around the Christmas shopping season:

  • Start saving for Christmas way before the decorations are going up. We save for Christmas all year around, in a dedicated online savings account at ING Direct. Simply divide your annual Christmas budget by 12 months and move that amount to savings. The ultimate budgeting challenge for kids would be for them to set aside a little allowance each month throughout the year for this very purpose.
  • Have a list, check it twice!  Whether you are shopping for groceries or toys for kids, it’s always a good idea to have a list. Stick close to the list and you improve your chances of staying close to your budget.
  • We don’t shop with money we don’t have. In my roundup post the other day I mentioned seeing customers in front of me charging Christmas presents on credit cards. My daughter is also old enough to notice this, and often gives me a knowing look when we witness it together. Remind your kids that buying stuff on credit cards is a bad idea, because you usually wind up spending more up front, and paying more for each item when interest charges are tacked on.
  • Don’t forget giving. We do not give gifts with the anticipation we will receive them. To reinforce this idea, have your kids give a little of their own money to a cause they are interested in, or a local church or shelter. The more personal, the better.


  1. Nice column; I always enjoy it. I hope you will write more about charitable giving this season–there are so many in need. My church in Connecticut has an “alternative giving” program that anyone can make use of (link below). We work actively with all of these charities and know that the money will be well spent. My own special interest is Mozambique but there’s lots to be done in this country as well.

  2. What a great exercise for kids. We also save for Christmas through the year, but we do pay for our gifts with our credit card. We stick to one card that pays reward points, we stay within our budget, and we pay our credit card bill in full, paying zero interest as a result.

    I like the idea of reminding them to give to charities as well. They have a very successful can drive at my kids’ school every year.

  3. It’s pretty amazing that kids can pick up so well on what we would usually consider a very “adult” topic–credit cards. I applaud you for teaching your kids valuable lessons from an early age. While my parents were always very smart with their money, many of those important lessons didn’t transfer down and I had to learn things the hard way.

    I agree with Drhelen–charitable giving is often overlooked at Christmas because everyone is so wrapped up and financially drained with giving presents to other people. I hope we can emphasize that in our own lives and through our blogging.

  4. I didn’t do my Christmas club this past year and now I am scrambling, watching the sales. You can bet I started saving now for next year’s shopping. It is a lot easier to budget it for the year, saving let’s say $20.00 a week is so much easier than trying to find an extra $500.00 or more when the shopping does start.

    I think this is a good time of year to teach kids about giving to others. Since our kids started school we have always participated in the Giving Tree put on by the Salvation Army in local stores in our area for Christmas. They each get to pick a tag off the tree, usually for a child around their own age, and we shop for that child’s present. Each tag usually lists a “want” and a “need.” The girls usually like to buy something in addition, like new hair ties, brushes, mittens, etc., to put into their gift package. They are both teenagers now and enjoy being able to do this every year.

  5. I think it’s really important to remember that not everybody who uses a credit card is spending more than they earn . . . there are many convenient reasons to use a card that go well beyond spending more money than you have.

    Judging people doesn’t foster a learning environment or help them to find better ways to live.

  6. RLS: You make a good point. I will try to emphasize that idea to my kids so they don’t automatically judge credit card swipers as someone who cannot afford the purchase. Thanks for your comments.

  7. We adopted a small family for Christmas this year, in lieu of gifts among friends. At first, we were hesitant to inquire because we don’t have a lot to give. We mentioned $150 as our budget and were hooked up with a Mother and her 6 year old daughter. PERFECT!
    What we found is that the agencies will work with your budget and that every cent matters!
    I found the spirit of Christmas again when I saw the toys and clothes that my daughter purchased for the little girl. How exciting for us to wrap all this stuff! I bought a cookware set for the Mom (her request) and the department store kindly wrapped it and blessed it and me approximately three times each.
    This turned out to be a gift to me, to fill my heart with love and peace again.

  8. You are right to expose that we purchase differently than we want our children to do it. partly it’s because we want to be generous and don’t have enough money. We have other bills. The kids do not usually.

  9. I’ve been thinking a lot about this idea — I teach “life skills” math to struggling high school students and budgeting is an important part of the curriculum. However, I hadn’t really considered including a section on budgeting for Christmas. I might just have to change my lesson plans for the rest of the month . . .

    And perhaps I should move the section on credit cards up a bit to calculate how much those expensive gifts cost with a few months of interest added on. This is a great idea overall, frugaldad. Thanks!

    Where did the gifts in the program come from?

  10. I personally don’t want my kids going shopping while at school developing wish lists that they think they are going to be able to buy.

  11. I start Christmas shopping in April, so by Ocotober they are wrapped and I get to enjoy the holiday season with no hole in the wallet and not only that, I have not been using a credit card for anything the past 6 years or so.

  12. Our elementary school had this too, but is was called “Holiday Shop” so as not to exclude or alienate non-Christians. I am rather surprised to hear it called “Santa’s Workshop”. No Jews in your school?

    The items run from 1 dollar to about 5, so it is not outrageous. It is mostly useless stuff, but more about the planning and giving than the actual item. The kids loved it, and it saved the parents extra trips out to take the child shopping for everyone.

    We finish Christmas shopping in September, except for the one big thing our teens each want. Birthdays, too, are predictable, so I shop around the time of the person’s birthday, but for the next year, not the current year. The result is a stress-free holiday season, and never a last minute over-spend during the year. We have the luxury of spending time thinking of each gift, and saving to boot!

  13. What a wonderful article! I just wanted to make a quick point about credit cards: many people who charge their purchases aren’t doing so because the funds are not there. My husband and I are both extremely frugal but use our credit card for almost every purchase that we make. We’ve never had a balance on our card at the end of the month and we never plan on having one. Our credit card company offers incentives for having a credit card (points that can be redeemed for gifts or cash) and just recently we cashed out our points for $300. We’ve never payed a dime to have the card. 🙂

  14. I use my credit card for every purchase and pay off the balance in full every month. If an item is damaged/defective and the store won’t make it right then the credit card dispute department is wonderful. After several hundred dollars worth of kitchen purchases arrived broken and the store basically said too bad I was able to have the charges reversed and buy those items elsewhere. If I had not used my plastic it would have been a far more painful process to get my money back.