Children’s birthdays, Christmas, or any other holiday where they received cash for the occasion, is a very nice day for older children if they know a bit about the value of money. For little children, it’s just funny to look at their faces when they open an envelope and out comes a $20 dollar bill or a check. They push it aside and continue with the box that actually has a toy of some sort.
So, what are you doing with that $20 dollar bill or check? They got it for-let’s say their birthday— but what are you actually doing with it?
You know, and they know they actually don’t need more gifts. They probably have their rooms full of all sorts of toys that haven’t been touched in months, and they probably have more video games than GameStop.
Then , what do you do with their money? Does the money then goes into your checking or savings account? Are you keeping track of how much money you have put into your personal account over the years? Are you planning on reimbursing them later on? With interest?
It is so easy, isn’t it, to forget that the money is actually theirs? After the party and the cleaning, the stress or anxiety level drops and we forget little things that need to be taken care right away. A lot of people forget.
When our daughters were babies and were receiving a $20 dollar bill from grandpa and grandma, we did not open a savings account for them right away. We never slept a whole night for four months with our first daughter, can you imagine us thinking about investing their gift money then?
We opened a savings account for our daughters a while back with the money they received at Christmas and birthdays from family members – Yes, we did reimbursed them— The interest those savings accounts were earning was pitiful. We took the cash out and opened an account at an online investment company. We don’t regret it. We stuck with safe stock options, haven’t sold them, haven’t traded them — it’s $6.95 per trade — and we do not panic when their price goes down. We are in for the long run with their investment, and hopefully you will start investing their birthday money too. When they’re 18 and want to have control of their money, then it’s your choice if you want to be an advisor or let them have full control of their investment.
Little by little, those gifts can amount to something. If you have a financial advisor, ask for advice. This is only for you to start thinking about taking small steps with money that they probably don’t need right now. Think small first, when they’re older and see what you have done with their money they’ll thank you.