Last year you bought her a doll, which was reaped apart by the boys in the estate the next day and she came to the house drenched in tears and; and wiping her cheeks, you promised to buy her another gift. This year, you are planning to buy her a bigger doll, costing over Kes 3000 shillings.
Her brother received a bigger car, battery powered that he can sit in and direct around in the sitting room, knocking you and your visitors without any apologies. In a few hours, he will have removed one of the wheels and you would be wondered what is wrong with your children.
Gifts to children are meant to excite, love, teach and help them master the world around them. Ever wondered how the gift you give to your child helps him learn and master the world around him? Tearing gifts apart is one of the ways of learning. As a guardian or parent, you only need to get smarter on what gifts are appropriate for your children.
In this blog, Financial Matters is giving you some non-conventional options for gifting your child or a young person in a totally different way that is financial gifts.
Financial gifts refer to items that you give to your children and it helps secure their financial futures, examples being opening savings account for them, placing a deposit for a house or car in an account for them, placing college funds in an account or just cashing him or her with plain cold shillings.
You can also gift a child with a trip around the country or abroad to learn about global economic dynamics or you can enroll them in a personal finance class of your choice to help them understand matters related to personal finance.
Let us delve deeper and see how each of these gifts play to their emotions.
Financial gifts may not be your glamorous shiny immediate gratification candy box or your nude doll that elicit an adrenaline rush in your baby small torso. However, financial gifts will teach the time-tested values of financial wisdom.
When the boy opens the box and finds savings account instruments, or a share certificate, or a savings bond or a title to a plot, curiosity will allow him to ask the questions related to saving the financial instrument and you will get the chance to impart your first financial education class to the kid directly.
How do you gift financially?
Savings account; you open the account in a bank of your choice that has Junior savings account product and places the initial deposit amount into the account. You will receive a piggy bank or a savings box which you can wrap together with the other documents provided and place it under the Christmas tree.
Once the baby opens it and asks for its meaning, you can explain that he/she has to save his money in the savings box then once a month, you or both of you can take it to the bank. Later you can get statements from the bank and explain to the child what the increases in the account mean. These could be deposits or interest earned as well as reductions due to withdrawals or costs.
This will be invaluable in teaching the kid how to save.
Economic dynamics trip; Purchasing a trip with a travel company to a place with a dominant economic activity can help a child start understanding investments in-depth. A child born in Kamba land can be sent to the lake region to learn about the fishing industry and this can broaden his understanding of the economic dynamics in the region.
Children homes; if you are visiting a children’s home this season and wondering what gift to take, what about a one-year fee in college or high school for one or more of the children? What about purchasing a public medical cover such as NHIF for one of the children’s family?
Personal Finance class; Most adults have gone through life without the prerequisite personal finance knowledge and financial management has been a guessing game. You can change this for your babies; purchase a class in the financial training offered by qualified advisors and this can be a game changer for your child. He will learn the basics of finance, how to earn, keep and grow money. This will save you a whole load of a headache in having to clean the mess after your child has borrowed and spent the money on nothing or has diverted school fees because of poor spending habits.
Deposit for a car or a house or a plot; If this child is in college, a deposit for a car or a house can be a game changer for them financially. This can be done by placing the amount in a fixed or savings account and writing a note to that effect followed by an explanation once questions are asked.
In other countries which have a framework for children ownership or gifting, real estate, stocks in stable companies, Government Bonds, Commodities and Exchange Traded Funds can also be gifted to children.
Cash; Cold hard cash is always a welcome gift, but it might be most effective if it is money earmarked for a specific purpose, such as paying for youth camp or shopping for school items.
Financial gifts inspire huge bonding among family members because they have a bigger learning impact which draws you near to your child as you have to keep explaining what is happening to the instrument you gifted over the long run. Picture this, Upper Hill land prices averaged Sh20 million an acre 20 years ago and have risen to about Sh600 million per acre today, if your parent bought just one point for you, how different would your financial situation be today?
That financial gift that you give to a child to travel across Kenya or visit a financial trainer can spark interest in saving and investing and your child will be thankful because you will have given him a huge financial head start, which he can only realize with time. So, go ahead and plan a financial gift instead of the normal gifts.
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