Gifting a Financial Education


We’re certainly blessed to have a wonderful group of family and friends. We’ve worked hard to cultivate our relationships. We were very excited when the first crop of nieces and nephews came into our lives when we first got married. They were so cute and we bought them all the things that a good aunt and uncle should. Then more kids came, and more siblings, and well, the gift giving became a bit overwhelming.

We wanted to be fair with all the kids and give equal gifts. This was easy to do with the first three, but as the number of children started to expand into the double digits we had to come up with another game plan.

While the kids are little (before 10 years of age) we give mostly gift cards or cash instead of things, or we very carefully pick out gifts they’ll really appreciate. For instance, Mr. Moneyaire’s best friend’s daughter loves space so we named a star after her.

A worry we had was how to stay relevant in our nieces’ and nephews’ lives. What gift should I get a preteen or teenager they’ll actually appreciate? We came up with this; on their tenth birthdays we open brokerage accounts for them in our names, but we create a unique login for them. We prefer TD Ameritrade for its user friendly interface; buy/sell trades are free and there are no account fees. Wish they did fractional shares though!

After we open and fund the account (we kick it off with $100) we write a card to the recipient and let them know that, from now on, they won’t be receiving any more physical presents from us. We also let them know that they’ve been gifted $100 into a stock account and it will be their responsibility to pick stocks with that money. We use this as an opportunity to open up a conversation with them about what it means to buy, hold and sell stocks. We have conversations with them about how to go about figuring out what to invest in and help them with other questions they may have (what’s a dividend?). Throughout the year, we give them periodic updates of their stock holdings and at the end of the year we print out their account balances and write up a summary of what we think they did well, and where there might be room for improvement.

We created a schedule for how much the kids will receive for their birthday and Christmas each year. This helps to keep it fair to each kid, while also giving us an opportunity to increase the amounts as the child gets older. They get more money when they hit their teenage years, and more again once they’re ready to start driving or get a job. For now, we don’t allow them (or their parents) to add money to the account. We want to keep this as our gift to them and make sure that any money at risk is money that we put into the account for them.

We won’t be turning over any of the accounts until the kids are adults. We debate whether we should wait until they are 18 or 21 to turn the accounts over. While the accounts are under our purview, we don’t allow the money to be withdrawn from the account. Once we turn it over, they are free to make decisions on whether they’d like to keep investing or use the money for something else, like going away to college or a trade school…or even investing in real estate! Hey, an Auntie can dream can’t she?

So far the experience has been really positive with our nieces and nephews, and it’s mom & dad approved. The kids are excited about picking their stocks, and they all have shown really impressive research and analytical skills picking stock and selling it. Selfishly, it’s given Mr. Moneyaire and I an “in” with the kids – we always have something to talk about with them.

So far working with our nieces and nephews to learn how to invest has really paid dividends (mom joke!). The kids have learned about the stock market, how to buy and sell stock, what dividends are and to think critically about what it means to invest in companies. Some of them have also learned the lesson of when investments don’t work out and what the best course of action is to recover. The amount of money we gift the kids isn’t a lot but its enough to keep them interested and its a great learning opportunity for them. It’s giving them a strong hands on foundation in investing as well as a way for us to build strong relationships with them.

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