A Gift For The Future

Posted by David G. Evans

You know how it is, most children’s Christmas gifts have a short life – some don’t even make it to the New Year. The younger your child’s age, the shorter the potential novelty value, and then there is the problem of what to do with the unwanted presents so that they don’t end up in the local landfill.

hootloot, santa, savings, pocket money

The optimal amount

Research consistently proves that children only need a few toys or treasured items to make them happy. (See related post) Beyond this ‘toy sweet spot’, buying is often more for the parent’s benefit then the child’s; a way of easing their own guilt rather than increasing a child’s happiness.

Children’s studies also demonstrate that experiences rather than toys are more beneficial to child development (See related post)

Value for money?

In economic terms gifts often exhibit what is known as a ‘dead-weight loss’ i.e. the cost of gifts does not equal benefit experienced, or even the value in the eyes of the person you give to. The greater the quantity of gifts, the higher the potential dead-weight loss.

No one wants to spend a lot of money on a gift that the recipient doesn’t appreciate, however there is a way to ensure that there is no ‘loss’ and the gift will be the most valuable to the recipient.

What about giving them a saving account or an investment?

When considering what to buy children this Christmas, consider a gift for their future, or one that may value throughout their lifetime. Giving money can seem thoughtless, but young people love to receive it, especially if there is the idea that this will grow into something bigger.  

More precisely, giving a child an investment goes a long way and teaches young people to think longer term. This may not be as immediately appealing as a new toy, but over time, a child or young person will appreciate this, when most novelties have been long forgotten.

Learning the value of money and finance has been, to coin a phrase, ‘devalued’ but is coming back into currency in the school curriculum. Giving an investment teaches valuable principles about delayed gratification and building for the future, when the satisfaction can become so much greater!

Make it tangible

To help children appreciate the value of an investment, ask them to identify something that they want in the future.  A tangible goal is better than an abstract savings account.  Use HootLoot to create a specific long-term savings goal, so your child can see it and monitor their progress.

The actual goal is not so important.  Children’s priorities change and  HootLoot allows for development of new wants and needs.  The significant part is setting an identifiable goal to save towards. You will be teaching them important lessons about prioritisation, setting objectives and planning in the process.

How Much Is Enough?

This is a personal issue but if you can’t decide, allocate a portion (e.g. 20%) of what was going to be spent on Christmas presents, so it shouldn’t make a material difference to the Christmas present opening experience.

Get  family and friends to join in and crowdfund the goal! In your HootLoot account this can be done through the fundraising feature or simply as manual adjustments when cash is given.

The build up

If you make this into a BIG DEAL, children will feel that this is something very special that they are now mature enough to receive. This boosts self-esteem and confidence in their abilities.

Because this is the Christmas gift of a lifetime, encourage children to top their savings up through pocket money, rewards for chores, etc. In HootLoot they can use the Savings Calculator and ‘Automatic Saving Plan’ to do this regularly and see themselves building towards their goals.

It’s never too early

Christmas is almost here - don’t delay.  Make this Christmas gift the one that lasts beyond Christmas.

Why not as a New Year resolution, do the same every year from now on, forever building value in your child’s eyes?

 
 

 

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