One of the most crucial responsibilities parents and grandparents have when it comes to raising their children is to educate them in such a way that they are ready to handle the complexities of adult life. While teachers address the usual academics subjects like reading, mathematics, and writing in the classroom, learning about economics and personal finances are left out of the majority of public school curricula. That means the responsibility falls upon parents and grandparents to expose their kids to these essential lessons. The good news is that there are plenty of ways to help kids learn more about finances which don't have to wind up costing you a lot of money. These seven unique gift ideas will give your children a substantial advantage when it comes to financial security and money management skills in the future.
A prepaid debit card. Today's kids are more independent than ever before. Give a child the power and responsibility to make his or her 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 which allow parents 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 child a present which will not only bring a sparkle to her eye but may also appreciate in the future? Then it is difficult to go wrong with giving the gift of gold. You can choose to give gold in a variety of forms from coins to gold bars. You can usually find a large variety of gold coins with impressions to match someone's interests. Some givers may consider gifting 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 they should treasure it. Parents may want to hang on to it for their kids until they feel the child is responsible enough.
Purchase shares of stock in a favorite company. Introduce the stock market to a child by giving them real shares in the company which produces his or her favorite product. Not only will the child start their portfolio at a young age, but it is the perfect opportunity to sit down to have 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 including The Stock Market Game.
Contribute to the kid's college fund. While giving child 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 make contributions 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.
Board games. When it comes to games teaching kids about money, most people think of Monopoly and The Game of Life, but there are a lot of other good options out there.Payday is a another classic game where players will earn a paycheck, pay outstanding bills and have the opportunity to make deals on property. For something more modern, check out Thrive Time for Teens. Players will keep track of their income and expenses, and even learn about the importance of passive income.Dave Ramsey has a game Act Your Wage that is excellent for kids that will be leaving the nest soon to teach them about living debt free.
Online games and apps. Peter Pig’s Money Counter for young children is available to download for free on Amazon. In this interactive game, kids practice identifying, counting and saving money while learning fun facts about U.S. currency. The Game of Life is available in the app store for just 99 cents. Savings Spree is another app that kids 5+ can play to learn about saving, spending, donating and investing.
Books about money. While monetary gifts may increase the size of a kid's bank account immediately, providing solid financial education is worth much more in the long run. It is never too early to start helping a child to explore topics relating to money. There's a wide range of books which can help kids learn not only about the value of money but 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 children.
Fran McKay, CFP®This information should not be construed as investment advice or a recommendation of any specific security or investment plan. Investing involves risk; please consult with your advisor regarding your specific situation.