Financial gifts can help teach financial literacy

Reporter: Andryanna Sheppard
Published: Updated:

Are you tired of spending money on toys that just end up broken or in the back of a closet? Well, have you thought about giving a gift that keeps on giving? Financial gifts cut down on clutter and can help children in the future.

Money loses value because of inflation unless it is accruing interest or invested. Plus, money means nothing if the children receiving it do not truly know or understand its value.

financial gifts

NerdWallet‘s Personal Finance Expert Kimberly Palmer believes financial gifts can be a really good way to talk about money. Contributing to a child’s college savings account, or 529, is one good example. In addition, teaching a child about investments and the stock market could be as simple as buying them fractional stock shares.

“You want to make sure they understand what you’re giving to them and why,” Palmer added. “It opens up that conversation about financial literacy and that’s really the most important part. When you’re giving a financial gift, it helps them understand money a little bit better.”

The key to success with these kinds of gifts is staying organized, Keep a file with contributions and passwords to accounts to help keep track of those investments.

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