Learning how to handle the complexities of life is an important lesson for adults to pass on to their children and grandchildren. For the most part, personal finances are not included in the public school curriculum. So, what is the best way to teach these valuable lessons? Financial gift-giving is one way that is gaining traction.
Here are five unique gift ideas that will help provide your kids and grandkids with 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 that will be appreciated 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 most suitable for older children 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. There are several kid-friendly stock market simulators available online 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.
Contribute to the kid's and grandkid's college fund. While giving kids 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 kid'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.
A wide range of books are available to 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 Certified Financial Planner® professional can help you determine how and when to give monetary gifts.
Eric Braund, CFP®, CRPC®, holds his bachelor’s degree in finance from Hillsdale college. He is the founder and CFO at Black Walnut Wealth Management, a financial advisory firm providing counsel and fiduciary investment services to individuals, families, and private foundations throughout the Traverse City and Northern Michigan region. Contact him at (231) 421-7711 or visit BlackWalnutWM.com
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