• Five Gifts That Teach Kids About Money

Five Gifts That Teach Kids About Money: The Automatic Millionaire - Yahoo! Finance 12/20/2006 11:55 AM
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The Automatic Millionaire
by David Bach
Five Gifts That Teach Kids About Money
Tuesday, December 19, 2006
A few weeks ago, my wife, Michelle, and I were invited to our son Jack's pre-kindergarten
class to teach an art project. Jack is three, and the thought of teaching an art project to a
roomful of three-year-olds was both exciting and daunting.
What would we teach? Would it be fun -- and could we actually come up with a project
that would keep their attention?
The Plunk Factor
We arrived at Jack's classroom several days later -- armed with paint, glue, stickers, sparkles, and a white
ceramic piggybank for each child. The kids were bubbling with excitement as we got started. We shared with
them what a piggybank is used for as they worked diligently -- as only three-year-olds can -- at decorating
their own personal pig.
We continued with our money lesson. Coin by coin, we instructed, "This is a penny, a nickel, a dime, a
quarter..." At three years of age, most of the kids understood that a paper dollar was the "most money," but
some were happier with the "plunk factor" of the coins.
Some of the kids didn't want to put the coins in the piggybank. Instead, they wanted to put them in their
pocket. One little boy started to cry when the coins went into his piggybank and he couldn't get them out. (I
suppose he won't be much of a saver!)
We wrapped up our lesson by explaining the power of putting money in the piggybank now to save for a toy
later.
A Gift Bonanza
Such a simple lesson, yet it made as much of an impact on the kids as Michelle and I had hoped. And it also
got me thinking: During the holidays, what gifts can we give to the children we love that will teach them
about money and get them on the right track at an early age?
So here are my five favorite money-teaching gifts for children this holiday season (and, truth be told, these are
appropriate anytime -- not just at the holidays):
1. Piggybanks (ages 3-11)
The piggybanks we bought for my son's class cost about a dollar each. They're plain white -- perfect for
decorating and can be ordered online. Use them to teach your kids about the value of money -- what it's
worth, why you save, and how to save -- and have some creative fun in the process.
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Five Gifts That Teach Kids About Money: The Automatic Millionaire - Yahoo! Finance 12/20/2006 11:55 AM
For something a little different, check out Moonjar's moneybox. Made up of three compartments, the
moneybox inspires spending, saving and sharing. Another favorite is the Money Savvy Pig. This bank has four
different chambers -- one each for spending, saving, donating, and investing. It comes in a variety of shapes
and sizes.
My last piggybank recommendation is one I actually bought for Jack for the holidays. It's called the LeapFrog
Super Saver Teaching Bank. This bank tells you what each coin deposit is worth and then gives you a bank
balance. I know Jack's going to love it.
2. Storybooks about money (ages 3-8)
Books make such wonderful gifts, and there are so many amazing titles to choose from. Browse your favorite
bookstore or shop online.
Some of my favorite money storybooks for young children include "If You Made a Million" by David M.
Schwartz, "Alexander, Who Used to be Rich Last Sunday" by Judith Viorst, "A Dollar for Penny" by Julie
Glass and "It's a Habit, Sammy Rabbit!" by Sam Renick. Read these aloud to your child -- or, if they're old
enough, let them read them to you. Kids will enjoy the stories for what they are, and learn something in the
process.
3. Monopoly (ages 8 and up)
This classic board game has sold over 200 million copies worldwide over the past 72 years. This was my
favorite game growing up -- are you surprised? It can change your life when it comes to money, because you
can actually learn lessons from playing it.
The most obvious lesson it teaches is that you can't get rich renting. If you don't own property when you play
Monopoly, you lose. Renting makes the player who owns the property rich and, ultimately, the player who
doesn't own property poor. A lot like real life.
Other real-life lessons that Monopoly players learn is that it's easier to get rich and win the game by buying
less-expensive properties first, because you can build faster and then use the cash flow from these properties to
buy the higher-end properties.
There are countless editions of Monopoly available now, which makes it even more fun.
4. Beginning Personal Finance Organizer (ages 13-19)
If you've read any of my books, you already know how I feel about the importance of organization. The Cash
Cache, as this product is called, is a great way for teens to organize their financial lives.
This nifty organizer contains a 36-page handbook for beginners that covers the basics of personal finance. It
also includes templates for setting goals and tracking progress; four pouches to organize cash for saving,
spending, donating, and investing; handy pockets for financial documents; and even a small padlock for
privacy. This is a great gift for any high school student.
5. Stock (all ages)
Last year, I wrote a column about how my Grandma Bach taught me my first lesson in investing when she
helped me become a stockholder in my favorite childhood restaurant -- McDonalds.
Teach your child how to "own the place" by opening up a custodial investment account in his or her name. Let
your child select companies they have an interest in -- like McDonalds, Nintendo, Disney, and so on -- and
with your guidance they can invest in and become owners of these companies.
Teach them how to track their stock performance on a regular basis to watch their investment grow. Two
online services that make setting up a custodial investment account easy and affordable are Sharebuilder and
MyStockFund Kids.
Both sites allow you to open an account online in minutes. Sharebuilder requires no minimum investment,
while MyStockFund Kids requires only $10 to get started. Review the different types of plans they offer so
you can pick a pricing plan that works for you.
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Five Gifts That Teach Kids About Money: The Automatic Millionaire - Yahoo! Finance 12/20/2006 11:55 AM
you can pick a pricing plan that works for you.
Another neat way to purchase stock as a gift is through OneShare.com. The actual stock certificate from the
company you choose comes beautifully framed and engraved for your little shareholder. When I was small, my
parents gave me a share of Disney stock in a gold frame -- I still have it to this day!
Lessons for a Lifetime
Remember, it's not just the gifts that teach, it's the lessons behind them. Enjoy the holidays with the kids you
love -- and here's wishing you all a prosperous new year!
The Automatic Millionaire is the registered trademark of David Bach and FinishRich Media, LLC.
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