Simple Gifts to Teach Kids About Money

This holiday season, give kids financial lessons they will never forget.
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When it comes to gifts for kids this season, teach them how to be money savvy. What they learn will be remembered years after all those must-have toys are broken or forgotten.

Financial lessons are more valuable than most other holiday gifts. Here are a few ideas on how you can make a lasting impression.

Bag full of coins.

Never underestimate the amount of fun and joy a younger child can have with a bag full of money. Most kids can spend hours a day counting and recounting coins. Fill a bag with coins that add up to the cost of a present. To have the biggest impact, make sure the bag is filled with a variety of coins, including dollar and half-dollar coins, which kids rarely see. This will give them plenty to study and examine.

What they can learn:

This is a great way to teach children about the value of money and how waiting for something can often mean getting it more cheaply. After the child opens up the bag and spreads the coins on the ground, explain that the coins add up to the price it would have cost to get a present that they wanted, but you didn't buy. You have now created a situation where the child must make a real-life money decision of whether to go and buy the gift during after-Christmas sales. Is parting with the coins worth the price of the present? If it is, a child will also learn that the price of the gift is less after the holidays. That way, he or she can at least keep some of the coins.

Hobby price book.

If your child has a collection, consider getting him or her a price book that covers a hobby. While most people are familiar with price guides for popular collectibles like stamps, coins and baseball cards, there are collectors' books and price guides for virtually every hobby these days.

What they can learn:

Your child will learn: the basics of pricing and value; a collectible can also make money; scarcity makes things more valuable; and the condition of an item often relates to its worth. The boy or girl will be studying money-related numbers and learning how those are tied into the hobby. Best of all, it's a chance to discuss the hobby itself.

Business.

Giving a business to run isn't as difficult as it appears. For example, you can set up an account on

eBay

and let kids start a business or set up a Web site. (You can have complete oversight.) Give them money to buy products to sell or let them unload a boxful of stuff you have been wanting to get rid of. They can keep the profit. Gather the basic tools they will need to begin a business and let them take it from there.

What they can learn:

They will learn all the basics of running their own business and, with your help, gain the confidence that they can make money on their own without having to rely on a job in which someone pays them. Planting the seeds of entrepreneurship at an early age and helping them succeed in their efforts allows them to have the confidence to choose whether to work for others or for themselves when they are older.

Micro-loan.

Give a gift certificate from

Kiva.org

so your child can give a micro-loan to someone in another country looking to build or expand their business.

What they can learn:

It's a fantastic opportunity to teach children about lending. That is, when you borrow money, you have to pay it back. It can also lead to discussions about other cultures and what people who get the loan will do with the money.

An added benefit with many of these gifts is that, not only will your child learn more about finances and money, you will be an integral part of his or her learning and development. They will have questions and need your help with the ideas mentioned above, which means you will have more time to interact and spend with them.

While the child may not understand the true value of the gift when he or she receives it, it will sink in later in life.

Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.