Question about monetary gifts for kids

[secretpantssam]

I was just recently at a 1 year old's birthday party and I brought a gift of a toy and some clothes. Well when I got there, it seemed like everyone else also brought toys and clothes and there was a huge table full of toys and clothes that this kid may never get around to playing with or wearing. Well I got to thinking, I would love to start giving monetary gifts that the kids can save and use when they get older to buy a car, pay for college, stuff like that. I also don't always want to give cash because, though some of my friends have the best intentions, they aren't always necessarily thinking long term and about their child's long term needs. I looked into savings bonds, but apparently you need to get the kid's social security number and I thought parents might be weary of giving that out. Are there any other ways to give monetary gifts directly to the kids so that they can start saving for their future?

 

[sunlover13]

I'm pretty sure you do not need the child's SSN when giving a savings bond. There's a way to fill out the form where you use your own SSN, yet make the child or adult the beneficiary.

I'm sure the bank could help you fill it out correctly.

Another gift idea is if you find out where she likes to take the child's portraits, a gift card to there.

Or, a membership at the local zoo, children's museum, etc. if they do not already have one.

 

[4HppyCamprs]

Good Question. I put cash gifts away for my children but I would like another option beside cash to give to our nephew for various reasons. I also do not want to be intrusive asking for the childs social security number. So far I cannot think of other options so it will be interesting to see what others come up with.

 

[*pixie*dust*]

I'm pretty sure you do not need the child's SSN when giving a savings bond. There's a way to fill out the form where you use your own SSN, yet make the child or adult the beneficiary.

I'm sure the bank could help you fill it out correctly.

Another gift idea is if you find out where she likes to take the child's portraits, a gift card to there.

Or, a membership at the local zoo, children's museum, etc. if they do not already have one.

Savings bonds are no longer available through banks or other financial institutions. They can only be purchased through treasury direct online. This started about a year ago, so while a bank or financial institution can still cash them in, they won't be much help in purchasing. Check the treasury direct website-- it has a big FAQ area.

 

[Julie*]

You could also ask parents if they have a college savings fund set up that they are using. My parents used to do savings bonds for our kids but now have started writing checks directly to our 529 plans for each of the kids. I am so relieved that they are doing this for us instead of buying more stuff that we just don't need.

 

[It'sWDW4me]

If you're close enough (i.e. the child is your niece/nephew), maybe you could open a savings account in trust for the child and make a deposit on birthdays and holidays?

DS got cash quite a lot when he was younger. In fact, DFiL gives DS a $50 bill for Christmas every year. When DS was little (3-6), he'd excitedly wave it and say "Mommy, I got a dollar!!" Those "dollars" are still in his bank account and have grown into a few thousand over the years!

 

[cluvsdisney]

I usually write a check payable to the child although I couldn't find my check book for a couple of months this year so everyone got cash. But I also don't think it's up to me to decide how this money gets used. Since these kids are young, it's up to their parents to decide what's best for their children...they may put the money in savings for the future, may add it to other gifts to get something big the kid will enjoy or pay for some class the child would enjoy now.

As for savings bonds, the last time I purchased one, I was told I didn't need the recipient's SS# to purchase the bond but they will need to provide it when they redeem the bond.

 

[mrsbornkuntry]

This doesn't answer your question, but I like what my Aunt does. She doesn't send the kids anything at all on their birthdays, but every year at the end of August or beginning of September she sends me a check to "help with school supplies." I thought that was a great idea.

 

[msmama]

My son has received a few bonds from relatives and I've never given out his SSN so it's possible to do.

I have to say though, I find savings bonds kind of stupid as a parent. *I* have to keep track of it for the next 18 years or so and really it's never going to be worth that much. I had TONS of bonds that I was too use when I went out on my own. I cashed them in after college and it wasn't even enough to pay for my move across the country (and this was a good 20 years ago). I think they're overrated.

Also, (and maybe your friends are different) I am successful in my money, I'm not living paycheck to paycheck and have a good savings built up in addition to my retirement and my sons college savings is started (and it says in my divorce agreement that his dad pays for much of it ). I feel like people who give my son bonds could do something better with their money - even if it's not giving it to me.

As a parent, I'd rather get a small gift (a book or something) for my child instead of a bond.

Totally not your question at all and I went off on a bit of a tanget. Sorry.

 

[lizabu]

My kids aunts and uncles often give them cash for their birthdays. They can then either save it or spend it on what they want.

 

[SaraJayne]

Don't get savings bonds. They're barely worth the paper they're printed on.

Cash is the best option.

 

[CarlisleMom]

I have a different opinion. I love savings bonds. My in-laws bought DH savings bonds whenever they had extra money. This was back in the 70's and 80's. The big point is he did not get them right away even when he was 18. These bonds have added up to a lot of money.

When we got married in 1993 (DH was 30) they gave us enough in bonds to buy some of major appliances --- washer, dryer & refrigerator and the taxes on the interest.

When DH's dad died 6 months after the wedding, we got whatever bonds were in Dad's and DH's name. We were able to cash in enough to buy the car we needed and just put the rest away as our emergency fund.

When DH's mom died in 2005 we got the rest of the bonds.

We have been married now for 19 years. We cashed in enough last year to pay for our new kitchen. We still have enough saved to serve as an emergency fund. Most are hitting the 30 year limit on earning interest in about 2 years. We may lose some interest but are hoping to wait 5-7 years before cashing them in. By then DH will retire and our income will be much lower thus less taxes to pay.

We are now trying to the same for DD10. In fact when DH's mom died she had start buying bonds for DD. What a great present to leave.

 

[Sadie22]

I have I-bonds (inflation-based "savings" bonds). Some were converted from the EE savings bonds the grandparents gave us for the kids, but not all the kids needed money for college tuition. (If the proceeds of the bonds had been used to pay college tuition, the interest would have been tax-exempt.) I'm sorry we cashed the ones we did because they would still be earning a good amount of interest. Ones purchased now do not make quite as much as I-bonds did when we first invested in them, but they're still a good choice.

Holding money for college in a child's name can affect how much need-based aid he or she will receive. The bonds were given to us, not to the kids, in case that would matter when the time to fund college came.

I have a treasury account holding the bonds I purchased most recently. One of these days I will convert my paper bonds to be held in that account also.

 

[LJSquishy]

To be honest, a child doesn't want a savings bond for a gift. Just this past Saturday I asked my sister-in-law what to get my 6 year old niece and almost 4 year old nephew for Christmas...something they would enjoy. She suggested a savings bond or contribution to their college fund. No child wants that. And, it's not my responsibility to help pay for their college education should they even attend. I want to buy them stuff they want to play with, I'm their aunt!

Now, any kid over age 6 or so would enjoy cash. At that age, they know about saving money, and have the ability to think about whether or not to save it or purchase a toy on their own.

If you really want to give a savings bond or cash, I would purchase a small toy to accompany it.

 

[chris31997]

If it was someone you were close to, I would set up an account for the child and save for them. BUT I would also get them a small gift for B-Day and Christmas. If it was someone you were no close with than I would either give them a gitft card or gifts.

My MIL has done this for all her Grandkids, she gives them some money every week into an account that they don't know about but they get gifts at Christmas and B-days.

 

[secretpantssam]

Thanks everyone for your responses! I may just give money or gift cards for 1 year old parties and give gifts after that until the kids themselves will appreciate the money.

I think I may have been thinking too much into it

 

[budafam]

Funny this was brought up. My brother in law just gave my 4 year old daughter a savings bond for her birthday (well, he has YET to give it to her because he ordered it late and it's still not here). I'm fine with the fact if people want to give my kids money. They both have savings accounts set up and I put everything they receive in there. I'm also not a huge fan of savings bonds because they are hard to keep track of (I just lost my kids' social security cards for a bit)... anyways, my brother in law's reasoning is because I have sold some of the items that my children have received from others... yes, I have SOLD toys. Shame on me! I'm not sure if he expects me to keep toys forever or what but he gave my son a bunch of toys 2 months ago and then had this revelation so my daughter got boring old money for her bday. Not fair in my opinion but whatever... I'd rather they get cash so we can put it with the rest of their money.

 

[tiggger1]

My inlaws opened savings accounts for my kids. They give them a gift for their birthdays, xmas, and other occasions and then put a small amount of cash in their accounts each month.. my dd already has a few thousand and my ds has about about 1/2 that. she told hubby they will get the money when they need it..

 

[Ginny Favers]

To be honest, a child doesn't want a savings bond for a gift. Just this past Saturday I asked my sister-in-law what to get my 6 year old niece and almost 4 year old nephew for Christmas...something they would enjoy. She suggested a savings bond or contribution to their college fund. No child wants that. And, it's not my responsibility to help pay for their college education should they even attend. I want to buy them stuff they want to play with, I'm their aunt!

You're right that children don't want that at that age. However, my DD3 and DD6 have a room FILLED with unopened toys they got from parties (and we've never had big blowouts-- just small family parties). I call it my toy store, and will likely end up donating it all this Christmas. I really cringe every time they get more toys, especially since we have a big house that's loaded with them already, and nowhere to put it. It gets to be where it's just too much.... and they don't value anything at all.

But of course you don't want to just give boring old college savings or clothes, either-- because no kid cares about that. So, what I urged my family to do is just buy something small-- $5- $10 tops. It's amazing what you can get to thrill a child without spending a lot of money. She got make-up and hair accessories and little toys, enough to excite her for weeks-- but nothing too extravagant. And many of my family members also included money for college savings. So she was happy, and her college fund got a boost, too.

My 6 year old IS just starting to get the value of money, though, so I can see in the next few years where cash would be very appreciated, so she can go out and buy her own things. But I definitely agree that you don't want to JUST give college savings-- there should be something in it for the kid to enjoy now.

 

[Ccann]

My DD6 she loved getting money, and really just anything. I would be happy if my sister or mom would start doing those for the kids. Not for college but for when they get older a trip out of the country or something once in a life time.

However when someone gives cash it goes straight into the savings account and we go shopping for a toy or something they want. I pay for that the kids don't know the difference so they can tell their friend that they used the money for this toy or activity.