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?
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.