In 2015, the average family spent about $140 on Easter-related goodies. That's a lot of cash for a lot of sugar. Is it a good idea to be spending so much on something that's gone by the end of the spring? (Aside from those immortal Peeps, of course.) Or is it better to save your dough and give them some lessons in personal finance instead?
Now, I'm not going to be the one to suggest that the Easter Bunny forgo candy in favor of sensible financial gifts. It's the Easter Bunny, not the boring Easter Financial Planner, after all.
But there may be ways to weave in personal finance lessons while letting your kids gorge on some treats. Here are some good "financial" alternatives to chocolate bunnies and jelly beans, and why they're so much sweeter as gifts than sugary, empty calories.
1. Kids Need an Early Lesson in Saving
Many banks offer savings accounts for people under age 18, with parents having joint custody and control. Other banks, including Wells Fargo, have some accounts allowing children over 13 to have full control. Your kids are free to use the savings account and learn about deposits and withdrawals, interest, and even how to use an ATM card.
2. Savings Bonds Teach the Power of Patience
It's easy to purchase U.S. Treasuries through Treasurydirect.gov and gift them to whomever you want. You can even have a gift certificate delivered with the bond. Savings bonds are very simple financial instruments that are virtually guaranteed to grow in value over time and teach children about interest. And if they are long-term bonds, they'll get lessons in patience, as well.
3. Becoming a Choco-Stock Holder Is Way More Fun Than Just Eating Chocolate
If you want to let your kids embrace chocolate, but give some financial lessons along the way, give them a few shares of a chocolate or candy company. Hershey [NYSE: NSY] is the largest chocolate company in North America. Its stock is a solid performer with a 2.5% dividend. Another solid option is Rocky Mountain Chocolate Company [NASDAQ: RMCF]. And it's also possible to invest in international chocolate makers including Nestle and Cadbury.
4. They Can Learn How to Build a Nest Egg
Let's say you take that $140 you're planning to spend on Easter and instead, place it in an index fund that mirrors the S&P 500. If you do that every year for the next 10 years, you'll have more than $2,000 to give to your kiddos, according to most investment calculators. Do it for 20 years and you'll have more than $6,000. Do it for 30 years, and you'll have more than $14,000. Seems a lot better than cheap baskets and piles of fake grass, am I right?
5. Give Them an Early Start on Saving for College
It's hard to think about your kids going off to college when they still believe in the Easter Bunny. But college ain't cheap, and there may be no greater gift than helping them avoid thousands of dollars of debt when they graduate. A 529 college savings plan will allow you to put money into the stock market and have it grow tax-free, provided the funds are used for college later. And you may also get some additional tax breaks from your state. The annual cost of public college tuition in 2030 could top $40,000, while private school tuition might run you $90,000 or more, according to the College Board. Start saving now! (See also: The 9 Best State 529 College Savings Plans)
6. You Can Help Them Start a Business
When your kid is opening a Hershey bar, consider telling him the story of how Milton Hershey founded several businesses before hitting it big with chocolate. Your kid has great ideas. Why not help them see if they can turn their smarts and creativity into a money-making operation?
You can help them craft a business plan, learn how to develop and market products, and even keep a balance sheet. Many schools offer real-world business lessons through the Young Entrepreneurs Academy, so it's worth exploring whether the program is available in your area. Even if your child isn't ready to start a business now, giving them lessons in entrepreneurship can open up a world of opportunities later.
7. Make Chocolate With Them Instead of Buying It
Adults know it takes time to properly save for big ticket items like homes and cars, and that the most patient investors are the ones that come out ahead. By teaching your children to make chocolate instead of getting store-bought candy, they will learn the value of patience over immediate gratification. They'll also learn how to be frugal by exploring DIY options, rather than immediately spending money on pre-made, overpriced items. Because, after all, their homemade chocolate is bound to taste better than whatever the Easter Bunny drops off.
8. Give Them an Allowance — And a Budget to Buy the Chocolate
Depending on the child's age, it may be time to pay them for doing chores around the house. It's often recommended to give a child 50 cents a week for every year they've been alive. So a six-year-old might get $3 a week if they take care of their responsibilities. But the allowance should also come with lessons on spending. Set limits on what a child can spend each week, so they understand the power of accumulating savings. Who knows? Perhaps they'll realize they can afford even more than what was left on Easter morning.
What other gifts should the Easter Bunny give other than candy? Share with us in the comments!
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