Your child’s assets Gift money: in a piggy bank or an account?

Your toddler’s godfather proudly gives them some crisp new banknotes. What do you do with that gift money?

It’s your child’s birthday! Their godfather is happily demonstrating how the fresh bank notes have no creases and how new they are. But what’s your toddler going to do with the money? You’ve guessed it: They’re going to crumple it up, rip it into a thousand pieces or draw on it. So, it’s your right and also your obligation to look after your child’s gift money. But what should you do with it?

Children’s assets

When a child receives money as a gift, this is part of their assets. It belongs to the child but is managed by their parents, who are now also bookkeepers – they pay the money into the child’s account or put it in their piggy bank.

Explain money

In their first few years of life, your child is too young to understand the meaning of money. But as soon as your child starts asking about the subject, explain to them that you will be looking after their gift money until they get older, that it will be put into a savings account or a piggy bank, and what the money is for.

Guide them through it

Let your child put the money into their piggy bank themselves or take them to pay the money into their account. If your child receives money directly into their account, show them how much they’ve got. This makes the gift more real for the child.

Education or toys?

Speak to the person giving your child money about the purpose of the gift. Does their godfather already have something in mind for the money? Is it for the child’s future, their education or traveling? Then it’s best to set the money aside in an account. Or is the money for use in the near future, perhaps for a big toy? Then it’s better to set it aside in a piggy bank and discuss what your child wants to spend it on. For older kids: Get them to make a “thank you” card from you both – a homemade card always brings joy to people’s faces.

UBS’s educational principles

This article was written in collaboration with educator Marianne Heller, who has years of experience in teaching financial education and debt prevention programs for children and young people.

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