When I was a kid, I always loved birthdays. I loved them since I knew it was my day to feel special and I would get to go to one of my favorite restaurants –Chi Chi’s Mexican Grill. I got a chance to wear the big Sombrero and everyone sang the Chi Chi’s birthday song. In our household, birthdays were always celebrated. Birthdays were great because of the singing, the yummy cake and of course the GIFTS.
I distinctly remember how excited I would get to see huge brightly wrapped packages with my name on them. The bigger the better. Most of the items that I absolutely had to have —Teddy Ruckspin, a Cornsilk Cabbage Patch kid, and the Captain Power activity set were fun for about a year…and then replaced by the next new toy. I used to love to rip open the paper and see the surprise that was there just for me. I also remember my disappointment when I would see small thin envelopes as gifts—since well they just weren’t that interesting, then. Looking back –those small thin envelopes were some of the best gifts I could have gotten. Check out my list of financial empowering gifts below to find out why.
1) U.S. Savings Bonds: Those small thin envelopes held savings bonds! A savings bond is an affordable, safe and convenient way for you invest on your child’s behalf. When you buy a savings bond, you loan the amount you paid for the bond to the U.S. government. Over a period of time (up to 30 years), the savings bond earns interest. After 12 months, the savings bond can be cashed for its face value plus the interest it has earned. I had an aunt that would give us paper savings bonds gifts every year. I actually never saw the paper bonds –they were handed over to my father for safe keeping. My aunt begin giving us bonds when we were children –all the way up to high school. My dad told me that many of the bonds we received back in the late 70’s helped to pay for my college education. Now that’s a gift that keeps on giving. Nowadays purchasing savings bonds is easier than ever. It is all online via TreasuryDirect.gov. You can actually purchase savings bonds for as little as $25. Find out more about purchasing savings bonds as gifts here.
2) Treasury Securities: Most people are familiar with U.S. Savings Bonds –but did you know there are other ways to invest and benefit from the safety and soundness of the U.S. Government? The U.S. Treasury offers tons of short and long term investing options. These are called Treasury Securities –and a “security” is just a fancy name for an asset that can be bought and or sold. You can invest in T- Bills, Treasury Notes, Treasury Bonds, TIPs, and EE/I Savings Bonds—starting with only $100. Find out more here. Of course, you can also buy your child individual securities or mutual funds. But if you do purchase savings bonds, individual securities, or mutual funds as gifts, be sure to also get them a small tangible gift as well. Chances are your kids will be like me — I didn’t understand that value of the boring flat envelopes –I wanted something I could touch and play with.
3) Cash: There is nothing more empowering that cash. It is finite, countable, and easy to spend –and save. Giving cash as a birthday gift also encourages a child to be aware of how much items cost. Don’t worry about the amount. In fact, I would consider only giving small amounts of cash to children for birthdays- in order to encourage your child to SAVE that amount of money along with any other money they received from chores. My grandmother gave me $5 for my birthday from age 5 to 18, and it was just fine.
4) Wallet/Change Purse: All children should have a consistent storage place for their money when they are on the go. Pockets of jeans and coats just won’t do. Giving a child a wallet or change purse will help to teach them to be aware of the value of money and that it should be protected.
5) Money Jar/Piggy Bank: All children should have a consistent storage place for their money at home. Having a piggy bank or money jar in your child’s room creates of number of great opportunities for you to teach your child about a number of money related concepts like saving, counting, and determining needs versus wants.
Don’t forget about financial literacy focused books, toys and games. Those items of course are a natural choice. Happy gift giving!!!