This past back-to-school season has not been the seamless transition it usually is after the summer holidays, as we’ve all heard via voice notes that have been circulating on social media. And while we may chuckle at the sixes and sevens some parents may be experiencing, in terms of helping their children to conquer the new frontier of online learning, a point that is somehow overlooked is the psychological toll the displacement is having on children and what they see as their emerging role in this new world.

The complicated global dynamics of these past nine months should serve to underscore to adults that financial security is key for navigating a world that is increasingly becoming more insecure, not just for us but also for them. If you’re a grandma, an auntie or a godmother, this Christmas, more than any other, is the best time to give the young people in your lives gifts that will eventually be the most appreciated: Security for their future. 

Piggy bank: The Tried and True

For younger kids, it’s never too early to start them on a lifelong course of financial literacy. The piggy bank is still a good idea for instilling in the youngest children the lesson of always putting away money for a rainy day. Give a child one into which you’ve put money and encourage him or her to continue filling it up before emptying it to make their first-ever independent purchase. 

The savings account

For children who are a little older a savings account is really the gift that keeps on giving. Not only does it teach them how banking works (children are endlessly gleeful at the idea of the concept of interest), but it also gives them a sense of independence and having some say in the direction in which their life goes. You will be required to be a co-owner if the child isn’t old or responsible enough to take complete control. You can consider not only going the bank route but the credit union route, as well, if you have a view towards the child’s future home ownership. 

Cold cash

Raw cash, on the face of it, can seem to some people as being impersonal. But it doesn’t have to be. For older children, it not only provides a level of autonomy, but also an excellent opportunity to manage early income and allow them to start thinking carefully about money decisions.

For older, college-age children interested in purchasing, say, their first second-hand car, what a balm a cash infusion can be. Rather than buying them a new car off the lot, this is a practical lesson in fiscal responsibility. 

Life insurance

An underrated financial gift the humble life insurance policy for a child can build up a lot of money in cash value that can be very handy when he or she grows up. 

Other financial instruments

If tertiary education, and home and motor vehicle ownership are within your sights for your young person, consider investing in moderate to high-yielding instruments that will bring great dividends in the short and long term.

Stocks are actual shares in a company and the holder of these shares become partial owners of the company, making that stock equity. You can cash them out or keep them for long time, depending on the fates of the company. But, importantly, you can transfer them. Or you can gift them directly.

Bonds represent debt an entity issues with the agreement to pay interest for the use of the investor’s money. Bonds are often negotiable and, too, can be transferred.

Money market securities, which consist of negotiable instruments like treasury bills and certificates of deposit (CDs) are a good investment for funds needed in a shorter time period, and are basically a section of the market in which instruments with high liquidity and short-term maturities of one year or less are traded; a way of borrowing and lending short-haul.

Unit trusts are a good product for long-term investment. If you’re a good ways away from retirement, or your young person is still underage, this might be a good option to park some money in. A unit trust is a portfolio of stocks, bonds, property, cash and other asset classes chosen and managed by professional fund managers. The manager buys these securities on the fund’s behalf and then split into equal units and sold to investors.

Sure, a stuffed animal or a new outfit from a store can bring momentary happiness to a child, but children need reassurance that, despite the disruption of the current pandemic, they will still have a place in this world that they barely know.

National Commercial Bank will partner with you to find the best investment option for you through our wide range of product offerings. This Christmas, consider gifting your children and young adults investments that will not end up broken, dumped in the trash or returned for store credit. Demonstrate in tangible terms your love by putting them on a path to financial well-being.