One of the most crucial responsibilities families have when it comes to raising children is to educate them so that they’re ready to handle the complexities of adult life. While schoolteachers address the usual subjects like reading, mathematics, and writing, learning about economics and personal finances is left out of most public school curricula. That means the responsibility falls upon the family to expose kids to these essential lessons.
As a grandparent, it can be tough. You don’t want to overstep, but you recognize the importance of life lessons in raising kids, and you want to help in any way you can.
The good news is that there are plenty of creative ways to help kids learn more about finances.
A quick conversation with your kids about their comfort level with giving your grandchild a financial gift should be your first step. Once you know that they’re comfortable with your idea, one of these five unique gift ideas will give your grandkids a substantial advantage when it comes to financial security and teach them valuable money management skills as well.
A prepaid debit card. Today's kids are more independent than ever before. Give a child the power and responsibility to make their own financial choices and mistakes with a prepaid debit card. There are plenty of prepaid debit cards available but try to find one geared specifically to kids. Many of these cards have added features that allow you to view a child's purchases, block purchases at certain stores, and recharge the card when it is getting low.
Gold. Do you want to give a gift your grandchild will appreciate today and in the future? Then you might want to consider giving the gift of gold. You can choose from a variety of options, from coins to gold bars. You can usually find a large variety of gold coins with impressions to match someone's interests. Some may even want to gift gold in the form of jewelry.
Whichever form the gold takes, it is essential to explain to a younger child that it is valuable and should be treasured. This may be more appropriate for an older child when they are more responsible.
Purchase shares of stock in a favorite company. Introduce the stock market to a grandchild by giving them shares in the company that produces their favorite product. Not only will the child start their portfolio at a young age, but it is the perfect opportunity to sit down for a meaningful discussion about how the market works and why investing is an integral part of financial planning. For adults who don't want to spend much money on stocks or who want an older child to gain real experience when it comes to buying and selling shares, there are several kid-friendly stock market simulators available online.
Contribute to the grandkid's college fund. While giving grandkid’s money to help pay for college may not be flashy like gold or even as cool as a stock certificate, it can help them in the future. Family, friends, and relatives can contribute to the child's 529 College Savings Plan or Coverdell Educational Savings Account(ESA). Each of these plans offers different benefits, so talk to a professional to see which one is right for you.
Books about money. While monetary gifts may immediately increase the size of your grandkid's bank account, providing a solid financial education is worth much more in the long run. It is never too early to start helping a child explore topics relating to money.
There's a wide range of books that can help kids learn about the value of money and how to grow and protect what they earn. Choose a light-hearted picture book or an easy-to-read introduction about money for the elementary school crowd. For kids in middle school and above, consider books on investing.
Whichever gift you give, make sure that it makes financial sense for you. Speaking to a financial professional is the best way to determine how and when you should be giving monetary gifts to your grandkids.
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
Recent Insights from Black Walnut Wealth Management
- Investing for Retirement Income: Straw, Sticks, or Bricks?
- A Guide to Dividing Your Estate Unequally
- As the Coronavirus Continues, Avoid These Five Retirement Mistakes
- 2020 Q3 – Quarterly Update
- What is Fiduciary Investment Advice, and Why Does It Matter
- 4 Common Money Mistakes for Pre-Retirees
- Cares Act has Waived RMD Distributions for 2020
- 5 Steps to Managing an Inheritance for High-Net-Worth Individuals
- The Stock Market and the Economy Are Not the Same: A Guide to Understanding the Difference
- 4 Year-Long Tax Tips for Retirement