Thursday, August 14, 2008

Great Gifts for New Parents

Babies seem to arrive in waves. There's the spring wave that's usually around April, the July wave and the September wave. I don't have any facts to back this up I just know that these are the times that I seem to get hit with a wave of birthday celebrations. In fact, not one weekend in July was void of a kid's birthday party.

I've also got loads of friends, family members and acquaintances that are getting ready to add to their family either by adoption or birth in the next month. So how does one best welcome in these new people?

Well, we're not making any additions in our house, but experience tells me there are some gifts that while not too cute to unwrap are complete treasures to new parents.

First there's the Will. Okay, you can't exactly give new parents a will, but you should do all you can to encourage it. Did you know that 70% of Americans do not have a will? For anyone with children this is a must. And wills are not just for the wealthy. A will can state who will care for the child(ren) if something should happen to the parents. Without a will children become wards of the State. The State can then determine who will care for the child--not to say that might not work out, but it's better not to leave such things to chance.

Then there's the Coverdell Education account. The nice thing about these accounts is that anyone--family or friends--can contribute. And they don't have to be limited to college expenses. Hey, I love my father in-law and appreciate the bonds he sends the kids, but a Coverdell might offer a better return.

Here's the thing on Savings Bonds vs. the Coverdell. Bonds are secure and safe, but they earn very little. The exact rate depends on the bond, but when interest rates are low, bond return rates tend to be low. A Coverdell is invested in a mixture of stocks and mutual funds that will likely grow your money faster than bonds. If you have EE or I savings bonds already, you can roll them over into Coverdell and perhaps better your results over the long term. The Coverdell is not a simple account. There are loads of rules and clauses--too much to cover in today's post. But you can learn more by clicking here.

Another gift idea is Upromise. Yes, I've blogged on about this before. But this is another hint to friends and grandparents. When you open a Upromise account you can split your rewards between several children. You can even distribute rewards in percentages. So if one child is closer to college age, or you like one better you, can allocate a larger portion to them. You don't have to deposit money in, you just earn a (very) little by shopping and dining. My biggest caveat here would be that Upromise depends on merchants for sustainability and there is always the risk that they may not be around forever.

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