Great Gifts for New Parents

The following is a repeat performance of a post which first ran on August 14,2008.

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.

Babies Steal Your Money

Everyone says that once you have a baby your entire life changes. And you know what...it's true! You've not only added another person to your life, a person who can't do anything for themselves, you've entered the 6th dimension. That's when logic, reason and common sense money skills are completely overruled.

When you think that you need an stroller that costs nearly $400 or a $500 changing table. Or if your baby shower list is longer than you are tall, then you've completely fallen into the the baby crazed dimension.

How does this happen? It's an old phenomena called "Keeping up with the Joneses" and it can happen to anyone even the nicest, most down-to-earth, logically people--even you.

And you know what? No one (other than your mother) will tell you when you've gone over the edge. Everyone just smiles at your new purchase and never asks how your credit card or credit score are feeling. That's because they leave your house in one of two ways: their either shaking their head at your sorry state, or their thinking that their child is sad and suffering because they don't have the latest in infant software.

Here's the reality. People have been raising babies for centuries without fancy gadgets. You can too. Children do require a lot of your money for valid stuff like education, food, basic clothing, etc. They will also never stop needing your money--no matter how old they are. Think of all the ways your own parents have helped you. Is the real reason your not a famous artist because they gave you finger paints instead of a $200 easel when you were a preschooler?

Listen all the gear and fancy play things are nice, really nice but they aren't needs. They are wants or even less they are likes. That spendy stuff is for grandparents to buy as gifts to accessorize your adorable one. Let them make up for their leftover guilt of not buying that kind of stuff for you.

If you're lucky enough to have disposable income to purchase the finer stuff for your baby, remember this: they can't tell if it's awesome, they don't care if it's used. Save your money for things they'll notice like a college fund.