8 Great Money Gifts for Kids
December 10th, 2007 | by rachel |
Money is a great gift for any occasion! It appeals to people of all ages and “fits” everyone. There are times, however, when giving money to young people can be a little bit tricky. Until kids are old enough to understand money, it may be better to give something other than “cold, hard cash”. Even so, there are great ways to give money and money related items to children. These 8 ideas are excellent ways to share your generosity with a younger generation.
1. Enrollment in an Identity Theft Protection Program - These programs provide a variety of services to assist with protecting sensitive information BEFORE it is stolen AND with recovery services for money, credit, etc. if and when an identity is stolen. Liability laws for stolen identity do minimize the financial damage but nothing reduces the amount of time and energy necessary to restore an identity to its prior form. ID Theft Protection programs are an insurance policy for fixing whatever has to be fixed after an ID is stolen.
2. Credit Freezes - One way to protect the potential credit history of a child is to “freeze” access to their credit records. As of November, 2006, all 3 major credit reporting agencies offer credit freezes in all states. There is a small charge for freezing records but it is definitely money well-spent to keep a child from getting into credit problems before they are even aware that they have a credit history. Credit freezes must be filed with each credit reporting agency individually. To do so, check the websites for Experian, Equifax, and Transunion.
3. Establishment of OR Contribution to a 529 Savings Plan - These savings plans are one of the most popular ways to save for future college expenses. They are readily available, easy to manage and relatively low-risk. Anyone can contribute to a 529 Plan and earnings can be withdrawn, tax-free, when the time comes for the money to be spent for educational purposes. If you want to make a contribution to someone other than your child, check with their parents to see if a 529 Plan is already in place.
4. Bank Accounts - Perhaps the best, first lesson children can receive regarding money is to have their own bank account. It can be as simple as a regular savings account or as complicated as an investment portfolio. No matter what type of account it is, it needs to be accessible and visible so that the child can “touch and feel” it and watch it grow. The web sites listed below have some morespecific information about how banking works and they are written in language that kids can understand and learn from.
5. Custodial Accounts - These accounts, known as UGMA or UTMA accounts, allow for money and assets to be transferred to minors without having to have official “trust” funds set up. Depending on the state where they are set up, there CAN be tax advantages. One problem with these accounts, however, is that the money/asset does NOT have to be used for educational purposes. When the child reaches the “age of majority”, they assume full control of the money/asset with no restrictions on how they use it.
6. Money Board Games - Games are one of the best learning tools available for learning about money. Kids of any age will enjoy the competition and the strategies involved in these games that have money as a major component. They are also entertaining enough for adults to play and enjoy family time.
7. Money “Tools” - All of these items make money “fun” and interesting. Certainly, that is most important when trying to teach children about anything!
- Moonjar - This tool is an excellent way to begin teaching young children about money. It is a specially designed bank that focuses on the concepts of “spending, saving, and giving” and it provides an easily accessible, visual way to do that.
- Financial Peace, Jr. OR Financial Peace for the Next Generation Curriculum - These are engaging materials developed by Dave Ramsey to teach children of any age about financial responsibility and “debt free” living.
- The LearningCents Bank or The LearningCents Wallet
- Coin Sorter Machines - These are available at most office supply and discount stores. With a little looking, you can also find “themed” versions for children. It is a great hands-on way for kids to watch their money accumulate. It also reinforces the concept that coins are as useful as “folding money”!
- ATM Savings Banks - This item works well for ages 6-12 because it involves kids with something they see adults use all the time. Depending on the version you get, these banks have all the features of a real ATM machine and it gives kids control over their money.
If there are kids on your shopping list this holiday season, you can’t go wrong with some form of money gift. Give something that will start them on the road to financial responsibility for years to come!