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6 Financial Gift Ideas for Your Children


A recent survey indicated that a whopping 84% of millennials regret getting a student loan, with the majority wishing they could hit a rewind button so they can do things differently. Understandably, as a parent, you want to do everything in your power to set your kids up for success.

Even if your children are too young / not thinking about retirement or buying their first homes yet, you can give them a good financial head start by giving them financial gifts. While it can be tempting to get them the year’s hottest games or the latest mobile phone, it’s financial gifts that will benefit them in the long term.

Below are six financial gifts that will keep on giving:

Financial Gift Idea #1: Prepaid Debit Card

Within the overall scheme of teaching your children how to be financially proficient, a kids debit card can be a powerful tool. A prepaid debit card can help your kids tackle important financial elements such as:

  • Tracking expenses through online tools, apps, or text alerts
  • Creating monthly spending plans using earnings and allowance
  • Understanding wants versus needs

A kids debit card also provides a tangible way for children to make the connection between the value of money and spending. Using this innovative tool is convenient and straightforward. Just download the app, and you’re good to go. 

Financial Gift Idea #2: Investment Account

Nowadays, you have the option to open a savings account for your kids. An investment account allows you to teach them advanced financial strategies like putting money on the stock market, trading on commodities, and buying mutual and traded funds.

Investment accounts will be under your custodianship. In other words, while your children can decide when, where, and what to invest in, you are in charge of the account and any liabilities.

Custodial investment accounts are considered one of the best financial gifts you can give. Apart from giving your children insight into how commodities, stocks, and money markets work, it also teaches them how to make wealth grow.

Financial Gift Idea #3: Savings Bond

If you are looking for a financial gift that earns interest and grows steadily, you can never go wrong with a savings bond. Treasury securities are debt instrument bonds that include notes, treasury inflation-protected securities, treasury bills, and savings bonds.

Most treasury securities are also called “marketable securities” since they can be sold and bought in secondary markets after you purchase them from the treasury. A savings bond can continue to earn interest for up to 30 years.

You can redeem the savings bond for its face value (plus any interest earned) any time after 12 months. However, if redeemed before it is five years old, the interest for the last three months will be forfeited.

Financial Gift Idea #4: Stocks and Other Equities

Stocks can be a risky pick for a gift, but they are smart ones nonetheless. Since there is no guarantee the stock will be there long enough for your children to enjoy the monetary gain, this gift is more about handing over a stock certificate.

Explain to your children what a stock is and how it works. It is also ideal that you teach them how they can add value to their stock over time. You can also encourage them to buy stocks and become shareholders in companies they are familiar with, like Target, Disney, or Activision (the company behind Guitar Hero).

Financial Gift Idea #5: Life Insurance Plan

Life insurance can come across as an odd gift choice for children. After all, there is this common misconception that life insurance policies are typically sold to pay for funeral expenses and other financial protection to the beneficiaries if the insured individual passes away unexpectedly.

However, purchasing coverage for kids can help you build up thousands of dollars in “cash value” that can come in handy once they grow up. Consider comparing life insurance rates so you can invest in the best policy at the right price.

Financial Gift Idea #6: IRA (Individual Retirement Account)

If you want to venture away from the conventional, consider opening up an IRA for your children that family and friends can contribute to. This off-the-wall idea works, provided your children are already earning money.

There are two basic rules you need to remember if you opt for this option:

  1. Your children should be earning money since the amount you can contribute is $5,500 or their entire salary (whichever is smaller).
  2. They can’t touch it until the age of 59.5.

While this can seem like a strange gift, it makes perfect sense if you want to teach them patience. Waiting for over 40 years just to enjoy your gift can also highlight the importance of choosing long-term gain over short-term pleasure.

Final Thoughts

Don’t default into believing you have to give your children gadgets and money as gifts. You have the option to offer something much more valuable—smart financial guidance and a superb financial head start.

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