Gifts Your Kids Can Really Use

12/03/2012 9:15 am EST

Focus: MONEY MANAGEMENT

Terry Savage

Author, The Savage Truth on Money

Like a foreign language or riding a bike, teaching kids the value of money is best done early and thoroughly, writes MoneyShow's Terry Savage.

Shopping for holiday gifts for children or grandchildren this season? Surely you’ll be spending money. So why not make the gift itself teach something about the value of money? Here are my annual holiday gift suggestions for children.

Money Savvy Piggy Bank
This is my all-time favorite gift for children as young as four years old, but one they can keep into their teens. This four-chambered translucent pig in various colors has slots for money set aside to Save, Spend, Invest, or Donate. Thus, it teaches children the importance not only of saving money, but prioritizing its uses.

Order at www.msgen.com, where entrepreneur Susan Beacham has also created games and an app to download. The price of the piggy bank is $16.99, and it comes with a coloring/activity book to help teach young children. Also available on Amazon.com.

Soccer Ball Digital Coin Counting Bank
When your young teens get past the piggy bank stage, but still want to save, try this bank shaped as a soccer ball (football and basketball banks also available). It counts the coins as they are inserted, and shows a digital total, as well as offering sound effects. From Trademark Games. Price on Amazon is $8.88.

The Allowance Game
The holiday season is exactly the right time to prep your pre-teens for earning an allowance starting with the new year. And this board game is designed to make the entire concept fun and educational.

It’s created by Lakeshore Learning Materials, which says: “Players race around the game board doing chores to earn their allowance...then save it or spend it on things they want, learning to make change, handle money, and more.” Price is $16.95, on Amazon.com or LakeshoreLearning.com.

Moneybags Coin Value Game
Today’s store cashiers can’t make change for a dollar without the register doing the math! Here’s another game from Lakeshore Learning, designed to teach kids the value of coins—and work.

This board game has a spinner, but with an unusual twist. It tells you which coins can be taken from the bank to collect your earnings. Not for young children because of small pieces—but ages 5+ can learn a lot about money. Goes for $14.28 on Amazon.com.

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OneShare.com
Oh, so you wanted a real gift of stock to get your child or grandchild started on investing. That’s easy at www.oneshare.com, when you click on the tab marked “My First Stock.”

You’ll get a framed stock certificate, along with real-life ownership of one share of stock. There’s even a guide to help you search relevant companies for girls or boys—Disney, Mattel, Dreamworks, McDonalds, Nintendo, and Gap.

You’ll receive a startup kit that includes a gift card, and you can have your certificate framed and personalized, plus the child will receive a colorful book explaining stock ownership. Price depends, of course, on the stock chosen from 200 companies, as well as the framing style. Call early to make sure your gift arrives on time—888-777-6919.

529 College Savings Plan
What goes best with an educational money gift like those described above? Real money!

 The very best, and ongoing, gift that a parent or grandparent can give to a young child is to open an account in a 529 College Savings account. There the money will grow tax-FREE if it withdrawn to use for college expenses for any child in the family, at any accredited school in the country. Add to it regularly or for birthdays and holidays.

There are so many different 529 plans that you’ll need some resources to choose one. The place to start is www.SavingforCollege.com—the independent Web site that explains and rates college savings plans. Hint: you don’t have to use your own state’s plan, although it might offer a state tax deduction.

So do your homework. Or if you want me to make it absolutely easy for you, here’s my pick, no matter where you live. Just go to www.price529.com or call them at 800-369-3641 and you can open a 529 account at T. Rowe Price online or over the phone in just minutes. Minimum investment is $250, or $50 a month if you sign up for an automatic investment plan.

And, finally, if you get bored after holiday presents or football games, go online to www.OrangeKids.com—a free Web site by ING (CapitalOne), that has won awards for its outstanding video and graphics designed to teach pre-teens about money and investing.

The only real investment here is your time to sit down and talk money with your child. That’s a gift that will continue to give over the years. And that’s The Savage Truth.