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Savings bonds: Gifts for the kids or a grown-up investment?

Those little pieces of paper have real value

by Single Ma  |  1014 views  |  0 comments  |        Rate this now! 

When you were a kid, did all the older people in your family give you savings bonds for every occasion? As an only child who wanted toys, toys, and more toys, I didn't really appreciate them back then. I remember...

One Christmas, my grandma gave me a $50 savings bond.

“Huh?” was all I could say. Then “thank you” after my mom popped me in the back of the head.

Then for 5th grade graduation, my great-aunt gave me a $100 savings bond.

“Not this again!” I thought as I remembered the same bullcrap from the previous year. A dry “thanks” accompanied a forced smile.

EVERY SINGLE birthday, my uncle gave me a $100 savings bond.

I wanted to scream, “CHEAP BASTID, WHERE'S MY BARBIE!” But I said "thank you" like a good little girl, then rolled my eyes when he wasn’t looking.

Throughout the years, it was the same ole same ole. I’m telling you, at age 10, I thought it was the stupidest (is that a word?) gift you could give a child. What did I know? It was a piece of paper that looked like a check, but I was told it couldn’t be cashed for xx number of years. And if I tried to cash it before then, it wouldn’t be worth the actual amount on the front. What good is THAT to a 10 year old? I felt punished! Shoot, I wanted a Barbie Doll House…with the elevator! And new ingredients for my Easy-Bake Oven!! Hmph!

When I turned 18, my mom gave me all of those worthless pieces of paper (or so I thought) and let me have at it. With all of my "I’m grown now" attitude, I marched straight to the bank and cashed every one of them. Some had matured and some had not. *shrug* Only thing I cared about -- I had an extra $900 and change to SPEND on STUFF. A single mom barely making ends meet, I felt rich. Unfortunately...

It was gone in a week.

Lo and behold, I later discovered those little pieces of paper earned interest over the years AND redeemed their face value.

I also learned that Treasury bonds are safe investments, free of state/local taxes, federal tax deferred, or federal tax free if used for educational purposes.

And...

Deep down inside, I may still be the same ungrateful child I was years ago, but I've since learned the value of a savings bond. I should have known my elders were on to something. Especially Uncle Leroy with his stingy self! LOL But mama ain't raise no fools! They are now part of my investment portfolio.

About the Author

A working (single) mom and author of the personal finance blog Fabulous Financials @ http://fabulousfinancials.com

Read more by Single Ma

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