Come December 26, your kids might be a tiny bit richer. If their grandparents and aunts and uncles and generous friends toss a few bucks at each of your children, they might wind up with a tidy sum of money that will burn a huge hole in their pockets.

No doubt your kids will be tempted to pester you to take them to the nearest store where toys are sold. Imagine their glee at having their own cash to drop on the newest Star Wars toy or video game. For starters, this is a perfect time to sit down and introduce a few topics to your children like money management, saving, budgeting, and financial planning. It's on such a small scale and it involves their own money and something they want, so they should be a captive audience and receptive to your lessons.

Ultimately though, you have to ask yourself, “What is the best use for their money?” And if it's not buying a toy, here’s a second question: “How do I explain that to a child?”

Here are a few ways to handle that sudden influx of cash.

1. Save Some, Spend Some

This is the old 50-50 rule. Give them half to spend and half to save for a want on another day. Someday, your son or daughter will want something expensive and they’ll be glad they’ve got a few hundred bucks squirreled away in the bank to help pay for it. It’s little sums like this that will help them get it.

2. Put it Towards an Activity

Your children are probably involved in more activities than you can remember: sports, dance, music, gymnastics, scouts, etc. All of those things cost money and that Christmas cash might come in handy for some of these activities.

3. Put it Towards a Big-Ticket Item

Is your child ready for a smartphone or a tablet? Do they have their eye on a new game system? Socking this money away could help them get one of those pricey items.

4. Put it Towards a Membership

It’s possible that a year membership to a children’s museum or art museum or other family activity is a viable option for that money.

5. Teach Them Generosity

Sure, your child wants to go out and plunk that money down on a new toy, but that money might provide a lifelong teaching moment as well. Challenge them to find a local charity that they could donate to, contact them, and make a contribution. Better yet, encourage them to spend time at the charity and volunteer.

6. Make Them Understand Their Educational Needs

Is your child having some difficulty in school? Maybe there are books or learning aids that the money might pay for. The cash might also come in handy for a tutor, if they need help preparing for the SAT or other big test.

7. Show Them How to Manage Their Everyday School Needs

There is also a constant demand for money for school field trips, overnight trips with a sports team or band, or money for fundraisers and other activities. A sudden influx of cash could help them defray the cost.

8. Save it for the Future

When your children go out on their own someday, whether to their first apartment or off to college, they'll be glad they have some money in the bank to help them start off their independent lives on the right foot.

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