Financial gifts for kids
The first and simplest gift to give is money. The danger with giving money is that it doesn’t teach children anything and unless they are very disciplined they might be tempted to spend it rather than saving it. If you are giving a substantial amount of money to a child, consider giving the bulk of it to the parents to invest in a separate savings account and only giving the child a token amount to enjoy.
A savings account
Opening up a long-term savings account for a child is another possibility. You can make regular deposits into the account. You needn’t give the child access to the account, but advise them on their birthday/Christmas every year how much you have deposited into it. When they reach an appropriate age, you can give them access to the account and allow them to spend the money on an asset that will add value to their life – like a car!
Krugerrands make a wonderful gift. The child can see and touch it, but they can’t spend it and their parents can put it away carefully to keep for the future. Krugerrands are one of the easiest ways to own gold – which has held its status as an investment to have in times of global uncertainty. Krugerrands are also linked to the international value of gold, which means that the investment is protected from local currency volatility and devaluation and is therefore a true global investment that can be relied on. If the child in question is living abroad, a Krugerrand will also have great sentimental value as the child grows up and learns to appreciate their South African heritage.
Stocks and equities
Stocks can be a risky pick for a child’s gift, but if you choose secure blue-chip stocks that have shown consistent growth over the years, it can be a secure enough investment to give to a child. If you are gifting stocks to a child, ensure they understand how a stock works and how they can add value to the stock over time by buying more. Encourage them to follow the company they are now invested in and hopefully you will encourage an interest in financial investment that will grow over time.
A university/college savings account
Most countries have university/college savings accounts that you can open and contribute to over time. In many countries, these contributions are tax deductible. The wonderful nature of this financial gift is that you can rest assured that you are helping to secure the child’s future.