Let’s be honest. Your child doesn’t need yet another toy. Sure, they’re fun, but after a couple of weeks, toys are forgotten or broken (or both). Plus, what long-term benefit does a toy offer? None. In these economic times, you might try something a little bit different. If there are kids in your life, you might consider providing them with a financial gift. There are any number of useful financial gifts that can keep on giving — while providing children with a solid financial foundation for the future.
Young children get a thrill out of opening presents, and you can provide this thrill while giving something practical. There are any number of piggy banks out there designed to help children begin learning money management. These banks often have divisions so that children can see that some money is for saving, some is for spending, and some is for other purposes. Include a roll of coins with the gift, and the child can immediately begin learning valuable financial planning lessons. Check out the Laugh and Learn Piggy Bank, just $14.79 on Amazon.
Stock in a Company of Their Choice
If your child is a bit older, maybe it’s time to go beyond the saving and spending lessons and teach them about investing. Give them $25-$50 as a gift with the caveat that they must use it to purchase stock in a company. Show them how to sign up with an online broker. They may need to use a custodial account. Then they can pick a stock, and make the trade. No one is suggesting your kid go on to be a single stock day trader, but this lesson will help your child understand stock so they can grasp the more important lessons of continual, passive, diversified investing.
Math and Counting Games
Previously voted the Educational Toy of the Year by the Toy Industry Association, the LeapFrog Leapster Explorer Learning Game System has several games that can help your child learn math, the foundation for a good financial education. This toy is made by one of my favorite companies, LeapFrog. I tend to like the traditional LeapFrog games and movies with little Tad, so I’d go for Math Circus. The system itself is currently selling for $59.97 on Amazon.
College Savings Accounts
Consider opening a 529 plan for a child on your list. In many cases, you can do this with as little as $25. Then, for every gift-giving occasion, you can add a little more money to the 529 plan. It will encourage the child to make his or her own contributions — and maybe even spur the child’s parents into action. This is a gift that offers tax advantages to the recipient, teaches the power of compound interest, and encourages sound financial habits. Plus, in some states, you can receive a state tax advantage for your contribution. Make sure that you check the restrictions of the plan before you invest. CollegeAdvantage.com is offering a $50 bonus to get started with a 529 College Savings for your child.
Money Counting iPhone App
For only $1.99 in the app store you can have Coin Math loaded on your iPhone. Coin Math teaches your kids to recognize and count money. It comes with voice instruction as well, so your smaller one can play. Now let’s just hope they don’t get rid of the penny anytime soon rendering that skill useless.
Toy Cash Register
Another great money lesson comes from watching what happens at the cash register. Will you use cash or plastic? Debit or credit? Bring the cash register home from the store and let your child pretend to shop. Or let your child run the register while you shop. This Teaching Cash Register from Learning Resources runs $34.99 on Amazon.
My grandmother gave me a silver dollar as a gift once. That silver dollar, minted in the 1800s, is worth about $22 today if melted down, according to coinflation.com. Coins can be fun gifts for children to receive. Consider giving gold coins or silver coins. These are small, shiny gifts that light up the eyes, and are likely to appreciate in value over time. At the very least, they are unlikely to decline in value. Make sure you get these coins from a reputable source.
Editor’s Note: Find several coin options at the U.S. Mint. I really like these Chinese Silver Panda coins from APMEX. I have no idea if they are priced correctly at $35, but I would have treasured one of these as a kid.
My sister and I used to play Monopoly for hours. If your children are old enough (8+) then will certainly enjoy this classic game and you can relive your childhood and join them for a game. There are now many varieties of Monopoly to choose from: Monopoly Classic, Monopoly Electronic Banking, Monopoly Millionaires, Monopoly Nintendo, and Monopoly Junior Party (5+), to name a few. Find it at Amazon.com for $16.87.
The Old School Abacus
An Abacus is a great way for kids to visualize counting and perform simple math. The abacus, as you know, is the oldest form of calculator. Ancient societies used these to facilitate commerce. You can use one to help your kids learn to count. This Classic Wooden Abacus by Melissa and Doug will run you only $12.73 on Amazon. While it’s not a traditional Chinese or Japanese abacus, it will help you count to 10 billion if you use each row as a x10. For instance, the first row of beads counts as 1 each, and the second row count as 10 each.
This one is a little trickier. The child in question will need to have earned income. If you are thinking of a gift for a teenager with an after school job, a Roth IRA might be the way to go. You can contribute the amount of the child’s earned income — up to the Roth IRA contribution limits — to a retirement account that can benefit the child for years. Plus, withdrawals are tax-free for the recipient once he or she reaches a certain age. On top of that, there are certain conditions (such as education) that allow for penalty-free withdrawals for the recipient. This is another gift that teaches the value of compound interest while it keeps on giving.
Learn About Money Placemat
If your kids eat like mine, they certainly need a placemat to catch all the crumbs. I love placemats with something on them to enrich your child’s eating experience. Kids can get pretty bored at the kitchen table, so having something for them to check out can save your sanity when trying to talk to your spouse. I loved the United States map placemat I had as a kid and I would have loved this Learn About Money Placemat. It teaches your children about the different coins and even provides a little math lesson by showing, for instance, how many pennies make up a nickel. Find it at Amazon.com for $4.98.
My daughter loves playing with my wallet. She pulls all the cards out, looks at them, and then places them back in the wallet perfectly. It’s quite impressive actually. She needs her own wallet. I found this Cash N’ Carry Wallet, also from Learning Resources for $7.04 on Amazon.
My husband’s grandmother gave him a savings bond one year for Christmas when he was younger. It actually came in quite handy just after we were married, both in school, out of work, and in need of groceries. Savings bonds may not offer huge returns, but they do provide a gift that appreciates over time, and it provides a powerful example. You can even print out a gift certificate from the Treasury’s web site so that the recipient can have something tangible. Bonus: In most cases, the earnings from savings bonds are exempt from federal taxes if the child uses the money to pay for college.
Fun Book About Money Management
Another Children’s Book About Money
One of my favorite book series’ for children is the Berenstain Bears. I loved all of these books as a child and I enjoy reading them to my girls, although some of them can be quite involved (and my daughter does not let me skip pages or paraphrase). Anyway, the bears have a book about money, called The Trouble with Money. The moral of the story is delayed gratification and savings some money for a rainy day. You can buy it on Amazon.com for $4.99.
There is no reason to give children useless toys for Christmas. You can offer something much more valuable: A good financial start and solid financial advice.
What are some of the best money-related gifts you have given or received over the years?