It’s that time of year again and the graduation parties are once again as numerous as kids crying in my house. You’re trying to figure out what in the heck to get that nephew or niece, son or daughter, or friends child for their graduation. But you’re strapped for cash and can’t see spending more than $25, $50 or $100 on them. You’re also certainly wanting to spend your money wisely and not just give them cash that will be blown on boos and partying in college.
What can you give them that will teach them important life lessons for so little money? A book? Maybe, but you better make certain they’re going to read it or it will collect dust and end up in a recycle bin in a few years. A nice pen for their studies? Please don’t.
Instead of cash or books, how about introducing them to investing and saving? Believe it or not you can start them a brokerage account with a deposit as small as you can afford. That’s right, you can start them an account with a deposit as little as $5.
You don’t have much time?
Don’t worry – the process literally took me about 2 minutes to create an custodial account for each child. So, instead of jumping in the car, driving to the mall or store, dealing with the crowds, waiting in line to checkout, or even the time it would take you to get them a card – you can do this all in your underwear at home. What’s more you ask? Each birthday or special occasion, you can simply deposit more in their account with a simple click. They can watch their investment savings grow before their eyes.
Note: There is a waiting period until the account is approved, but with Tradeking, my account was approved in under 10 minutes. In addition, if you choose to fund your account via check – you’ll have to send them a copy of a voided check and a copy of your license. After they recieve this by fax or mail, it takes them 2-3 business days to allow you free transfer of your money from your bank account to your investment account.
What’s so great about this gift?
Not only is this gift something that will help the kid well into their future, it also helps teach them something most parents have a hard time doing, money management. By providing them the account, they can take future birthday or holiday money (or college graduation) and deposit it in their account, and become engaged in creating a plan for their future. It’s important to teach your kids about being frugal even if they learn through online schools in creating a plan for their future. They may save enough they want to go to online schools for another degree. They will also develop an understanding at a very young age in the power of saving and investing. Too often, kids don’t learn until it’s too late. This will help propel you to take the time with them to explain the importance of being smart with their money – and how a penny saved is a penny earned. Moreover, you can teach them about goals and the value of money. Too often kids don’t understand why it’s better to save than spend. You can take the opportunity now to not only buy them the best gift ever, but to invest in their mind and teach them financial independence.
The great thing about this gift too is that maybe you’ve no clue where you’re going yourself. Tradeking offers easy to understand investment lessons to help you get started with very little reading (you could also start with my basic investment lessons ). You could take this opportunity to kick start a plan for yourself. But back to helping your child with investing, they offer plenty of advice in making simple selections for the child based upon the kids age, etc. So have no fear, you need to know nothing to pick something for the kid or even yourself if you choose to get something going for yourself.