Do your kids like to give gifts for Christmas? My 5 year old loves to give gifts. It makes him very proud to do it. We do multiple crafts so a lot of our gifts are homemade. He decided that he wants to buy gifts too.
I don't believe in handing my kids everything, and I feel like if they want to buy gifts for people then he should earn money to do that. I think it is great that he is thinking of others, but I also feel like teaching him now about money will prevent problems for him in the future in regards to his finances. I think it also teaches him responsibility and that things don't happen immediately, and that sometimes you have to save up and wait for what you want.
So I asked him who all he wanted to give gifts to. We made a list, and then we went back through it and wrote down who he wants to buy something for and who he wants to make something for. It ended up that there were only a select few he wants to buy gifts for. We established a budget of $20, and he is planning on doing chores to reach his goal.
We are making a graph to chart his progress. After we were done planning he said "Mommy, if I have extra money after buying everybody their gifts I will be able to buy extra gifts for them!"
I think I am doing something right...