Every year at this time, I give some suggestions for holiday presents that have real financial meaning for your children and grandchildren.
This year, I'd like to start with a gift for parents: an excellent book that should serve as a guide to discussing money with your children from the earliest stages until their college years. New York Times financial columnist Ron Lieber has written “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money.”
His helpful tips about every money issue from allowance to the tooth fairy are just the basics. Beyond that, there is thoughtful guidance for parents about “how much is enough,” instilling gratitude and grace, and creating the ability to talk about money issues before there is a family crisis about the cost of college or a parental job loss. This book promotes not only financial good sense but also the right values in our children. It should be tops on your gift list.
Now, on to some other gift ideas for all ages that can spark an interest in money:
529 college savings plan: Last week's column covered how and why to open one of these tax-free plans to save for college. Just don't forget to give grandma and grandpa and any other relatives and friends the information so they can write a check to contribute.
Shares of stock: You don't have to have a lot of money to give small gifts of shares in the most popular companies or ETFs that will give a child a head start on investing and perhaps spark an interest that will last a lifetime. An easy way to do that is a gift card from Stockpile.com. Charge the gift to your credit card, and the recipient will be able to choose the stock of his/her choice. (Remember that at the age of majority — 18 in many states — the child takes control of the account. And assets in custodial accounts weigh heavily in the college financial aid formula.)
The Money Savvy Piggy Bank ($19.95; available only online at www.MSGen.com): This translucent plastic piggy bank is divided into four chambers labeled “save,” “spend,” “donate” and “invest.” It's available in six colors and comes with its own activity book.
And the creators of the Money Savvy Piggy Bank, Susan P. Beacham and Michael L. Beacham, have expanded their offerings. Check out their award-winning book for teens, “OMG: Official Money Guide for Teenagers,” and a follow-up, “OMG: Official Money Guide for College Students.”
Coin Math App (Recession Apps, $1.99): This entertaining app teaches your children how to identify coins, figure out how much money they have and how to buy things using coins. The practical lessons and concepts advance to suit kids in kindergarten through grade school. The time to start learning about money is now.
iAllowance App (James Spencer, $3.99): Stop nagging the kids about doing chores, and stop forgetting to pay allowances. This popular app makes an online game out of managing the family allowance. It helps you assign chores and creates “rewards” in the form of money in a “savings account” or “stars” for completing tasks in a certain time frame.
Coin collecting: If you're a parent or grandparent who's had enough of technology, maybe it's time to circle back to some old-time favorites: coin collecting. The U.S. Mint makes it easy to start a coin collection that doesn't have to be expensive. Avoid the gold and silver, and instead collect quarters from every state. It's a geography lesson, too. The U.S. Mint website gives suggestions, sells coin holders and gives access to kids' coin collecting clubs. Plus, you can add to the collection every year, solving the problem of what to buy in the future .
Be thoughtful about your holiday gifts to children. It's not just about the money you spend but also the money lessons they earn. And that's The Savage Truth.
Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” She responds to questions on her blog at TerrySavage.com.