While there isn’t much time left, it isn’t too late to get friends and family gifts that encourage fiscal responsibility. Below are a few savvy suggestions for children, teens and adults:
Children: These two gifts can introduce your children/grandchildren to the concepts of value, savings and interest.
- Piggy Bank – This simple, inexpensive product helps a child become familiar with the concept of money. Take the time to discuss the names and values of the different coins and bills when you add them to the bank. Periodically open the piggy bank and quiz your child on what the different coins are and how much money they are worth. The most common use of a piggy bank is to teach a child/grandchild about saving money. Often kids have a toy in mind that they desire and their parents tell them to save up their money for it. Saving money over a given period of time will help a child understand the value of items and the importance of spending money wisely.
- Savings Account – Opening a savings account for an older child continues the lessons established with a piggy bank and adds the concept of interest. Seeing an account balance grow through deposits and earned interest is a powerful lesson. When you establish the account, seed it with a $10, $25 or $50 gift and instruct the child that while it is their money, the seed money can never be withdrawn; it is incumbent upon them to build on the initial deposit. A couple of ideas on how to manage a savings account with a child. First, dictate that half of any money they receive (e.g. odd jobs, allowance, birthdays, etc.) must be deposited into the account. Second, they must wait a given time period (one week, two weeks?) to withdraw money for any desired purchase – giving them time to really consider if they want to spend the money – and they are limited to how much of their balance (10%, 15%, 20%?) can be withdrawn at any time or within a certain time (one month?) period.
Teens: These gifts expand on the lessons learned with maintaining a piggy bank and savings account, particularly with respect to not just saving, but putting earned income to work.
- Monopoly – This classic game is a great gift for teens. As most people know, the objective is pretty straight forward; move around the game board buying or trading properties, develop those properties with hotels and houses – collecting rent from your opponents – in an attempt to be the last player (mogul) standing. While there are numerous versions out there, go with the old-school, basic board game.
- The Motley Fool Investment Guide for Teens – In a witty manner – as to be expected – brothers David and Tom Gardner, The Motley Fools, impart their investment strategies to teens in this book. Although more than a decade old, the guidance is timeless. In eight sections, the Fools and writing partner Selena Maranjian demystify the stock market by describing and defining mutual funds, banking practices, IRAs, and DRIP investing. Additionally, the authors include numerous quotes from money-savvy adolescents who detail some of their rookie market moves in an attempt to help their peers steer clear of similar mistakes.
- Roth IRA – As with a savings account for a younger child or grandchild, sit down with your teen and open an IRA – I prefer a Roth – account online; a great first investment account. Contrary to what many believe, there is no minimum age requirement for opening an IRA account and making contributions. However, the individual must be receiving income from legally recognized employment. There is no doubt that younger individuals, teens or those in their early 20s, would have a difficult time maximizing contributions ($5,500 in 2014) or making significant contributions to their IRA retirement plans. However, there is significant value in building a foundation as soon as possible and developing good personal finance habits. Opening an IRA account is easy and can be done online, with companies such as Fidelity or Vanguard, in 15 minutes.
Adults: These gifts provide guidance on improving an individual’s total well-being and prepares them for building a firm fiscal foundation and securing a comfortable retirement.
- Bottom Line Personal Newsletter – Savvy Readers understand that total well-being involves more than just fiscal fitness. It involves mental, physical and spiritual fitness as well. This newsletter hits on all those areas. As noted by the editor, this semi-monthly newsletter seeks to provide the best information, from the most knowledgeable sources in the world, to help readers gain greater wealth, better health, more wisdom, extra time and increased happiness. Each issue is packed with useful information readers can digest quickly and easily; and start applying to their everyday life. A subscription is a great holiday gift. Visit the Bottom Line Publications website to purchase a Gift Subscription.
- Rendezvous With Retirement: A Guide to Getting Fiscally Fit – My first book, a “how to” guide, walks readers through developing a comprehensive savings and investment plan for securing a comfortable retirement, while reflecting on my personal journey to fiscal fitness. It provides guidelines for how individuals can determine how much money they will need – or desire – in retirement, necessary actions associated with retirement planning, behaviors that should be adopted in pursuit of fiscal fitness, provides the requisite tools for planning, provides suggested guidelines for funding various retirement accounts and highlights various personal finance philosophies. Available at Amazon [Kindle or Paperback Editions], the Second Edition starts with a Foreword by Brian D. Tramuel – a long time RetirementSavvy reader – followed by updated information on how Americans are preparing for retirement, new content on living more frugally and shares a new philosophy on home ownership. Additionally, the companion RWR Simple Retirement Workbook, comprised of the Spending Planner and Retirement Planner worksheets, is now available as a free download.
Spend some quality time with loved ones and enjoy this holiday season!