Savings Bonds and Beyond: The 5 Best Holiday Money Gifts for 2012
December 6, 2012 : Rob Berger - Guest Contributor
Ed Note: The latest gadgets are cool — but if you want to give a gift with a bit more staying power this holiday season, consider alternatives that can help shape someone’s financial future. Rob Berger of Dough Roller picked out a few of his favorite money gifts, exclusively for Block Talk.
The other day, my wife and I were in a big box store shopping for holiday gifts. As I looked at all the junk that lined the shelves, I mentioned to my wife what a waste most of this “stuff” really is. We buy it every year, give it away, and then our friends and family are left figuring out what to do with it.
But it doesn’t have to be this way. Particularly as we shop for our children and grandchildren, there are alternative gifts that can teach them about money and help set them up for a bright financial future. With that in mind, here are five money gift alternatives for this holiday season.
- Stock: Buying a single share of a company can be a great way to introduce a child to the joy and benefits of investing. Picking a company the youngster is familiar with builds excitement and curiosity. After the purchase, you can track the performance of the investment with them. With a dividend paying stock, they can also see the number of shares they own go up as the dividend is reinvested. And with really low cost online brokers, the cost of the investment will be trivial.
- Coins: My grandmother liked to buy silver coins. I still have many of the coins she gave me, most of which are U.S. proof sets. Coins can make a fascinating gift for children, and are a lot more interesting than gold or silver bullion. My favorite options are the 1/10 ounce gold American Eagle or the one ounce Silver Eagle. Uncirculated coins are ideal, in my opinion, but proof sets are also available for a bit more money.
- Savings Account: This may seem like an odd “gift,” but stick with me. As adults, we know that one of the biggest financial challenges we all face is saving money. One of the best gifts we can give our children is to help them develop the habit of savings early. With an online bank, they can easily watch their savings grow. And if they are really young, there are some great savings account options for kids.
- IRA: The thought of a child saving for retirement may seem strange. But the earlier you start saving, the less you have to save. We plan to open a Roth IRA for our daughter who just turned 18. It is a great gift for teenagers who are earning income. The gift can come when you help fund the account, so long as the total contribution falls within the IRA contribution limits, of course.
- Savings Bonds: The last gift idea on our list is the traditional U.S. savings bond. Given the rates that our government is paying these days, savings bonds are not high on my list. But they still represent a tried and true way to introduce a child to the joy of saving and investing. While savings bonds are now electronic, you can have a gift certificate printed through Treasury Direct. And you can still buy paper I Bonds with your tax refund.
So this year, rather than buying a plastic toy that will soon be forgotten, give a gift that will last a lifetime.