One of the most important things you can do for children is to teach them the basics of financial literacy. It’s important to teach your kids financial responsibility early, so that they are better equipped to succeed financially in life.
You can even give financially-minded gifts to other children in your life. Nieces, nephews, grandchildren, godchildren, and others can all benefit from your foresight. Here are some ideas for giving financially savvy gifts to the kids in your life:
1. College Fund Contribution
One of the best things you can do is open a college fund on behalf of a child. You can help him or her get started on the road to a good education. In the United States, you can contribute to a 529 plan, while in Canada the college savings plan is the RESP.
Find out if the child in question already has a college savings plan. If he or she already does have one of these plans, ask if you can contribute to it as a gift. Every little bit helps. You can give the gift for the holidays, and even go on to make a regular contribution for each special milestone, including birthdays and major life events.
Because the money is invested, it is a gift that has the potential to grow to be worth more than what you put in. It’s gift that keeps giving.
2. Coin Organizer
Younger kids really like to do things with their hands. Get a coin organizer so that they can start saving their money. There are cool organizers, like the one I had as a child, that lets you put a coin in, and then watch it roll down until it lands in the appropriately sized column. It’s a great way to save up, and the kids can watch the money grow.
You can also give money organizers that allow them to save up for different items. There piggy banks you can buy that help children sort their money into “long-term”, “short-term”, “charity”, and other categories. Help a child get started right with help from a piggy bank that organizes their money.
3. Stock in a Company
You can buy a child stock in a company he or she likes. Some companies, like Disney, will let you print out a gift stock certificate so that there is something to give. These certificates can come in attractive frames. Check into which companies the child likes, including different snack food companies, clothing retailers, and toymakers.
Being able to give ownership in a company is a fun way to get kids interested in investing.
4. Savings Bond
Another option to help encourage investing and saving is to get savings bonds for the kids in your life. No, the savings bond that my husband received as a child isn’t going to change his life, but when it matures it’s going to be enough to do a few different things.
You can also give gift versions that the Treasury Department allows you to print out for the purpose of giving. It’s another fund gift that keeps on giving.
5. Financial Books
If the kids in your life enjoy reading, you can give financial books that are age appropriate. There are books about money even for toddlers and elementary-school kids. You can purchase books in electronic format, so that older kids can carry them around.
Books about money, including those that teach teens about investing, make great gifts. There is nothing that can compete with the gift of knowledge. That’s something that no one can take away from your kids.
Giving Financially Savvy Gifts
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Remember, too, that you can give these gifts in conjunction with each other. It’s possible to create a plan for giving financially savvy gifts so that you lead the recipients on a step by step journey toward making better financial decisions.
Do your best to support the children in your life. If you give a stock certificate, talk about investing, and what makes a good investment. If you give a savings bond, talk about the importance of low-risk investments in a portfolio. Turn the opportunity to give into an experience that can help an important child in your life for years to come.