As a kid I never thought it was very cool when I received savings bonds as gifts on birthdays and holidays. “Are you serious? What am I supposed to do with these?” I mean, it was a nice gesture and all, but since I could not use the money for new toys, it really was not what I wanted…that is until I started getting older and realized that all these bonds given to me over the years was going to add up. I kind of wish that the people who gave me the bonds just gave them to me silently and handed me toys as well, but I did indeed know about each and every one of them that I received, because I had to write thank you notes every time.
That all being said, the next time a friend or family member has a baby, think about picking the kid up a savings bond. Put it in his or her name and hand it to the parents to hold on to. If the kid gets enough of them, when they are older these pieces of paper will be worth a pretty penny. With no state or local taxes to pay on them, you only have to worry about federal taxes when they are redeemed.
Why am I writing about this? Because we just cashed a bunch of bonds that had stopped earning interest…and the amount was nothing to sneeze at. Even though I know quite a bit about handling my money and such, turning in these bonds was quite an experience. I had never had this money, never invested this money, and here I was with a pile of cash to do with what I pleased. So we blew it on a 108 inch plasma. Um, no…just checking if you were still reading. We are putting most of it in our home fund and a little bit of it in our emergency fund just to pad it a little bit more. It certainly was not a bad gift, seeing it through my eyes as an adult.
Anyway, just something for you to think of before you drop $200 on plastic toys…take $50 of it and help the “future” kid out.