Give the Gift of Learning to Save

By DAVE KANSAS

The Yuletide season is approaching, bringing with it that annual challenge of what to give the ones we love.

For those with kids, grandkids, nieces or nephews, it provides a chance to give gifts that are fun and educational.

Alas, that's not so easy in the financial space these days. The stock market has rallied since March, but most retirement accounts are still battered. The Dow Jones Industrial Average isn't far from where it was around Christmas 1998, when Furbys and Palm Pilot PDAs were hot gifts.

Topping it off, hatred of Wall Street and the market is at a very high level. Main Street is aggrieved that rescued banks are rolling in bonus dough as ordinary folks fret about (still) falling home values and a tenuous job market.

This is a tricky environment to teach investing, especially to kids. But there are still good reasons -- and strategies -- for forging ahead. First, investing is ultimately about saving money. Teaching kids (and ourselves) the importance of saving money is always important. Second, the financial markets aren't going away. Helping kids understand how investing works while helping them save money remains a worthwhile endeavor.

Stock on Display

Along with Tickle Me Elmo, investment-themed gifts became extremely popular in the 1990s. During the technology and telecom heyday, it seemed the stock market provided the one true path to financial security.

That idea has soured a bit, but there's no shortage of companies out there that would like to sell you a single share of Walt Disney, McDonald's or Coca-Cola for the little tyke in your life. Firms such as OneShare.com and ShareInAFrame.com offer a full-service package that includes a share certificate, framing and engraving.

The catch: The one certificate ends up costing a lot more than a single share. In the case of Coca-Cola, the total cost for a certificate with all the framing is $145, much more than the $57 price for the single share itself.

In the current age, it might be wiser to do it more yourself. You can simply buy a share and then ask the company to provide you with a certificate. ShareBuilder.com, owned by Dutch bank ING, gives investors the chance to start investment accounts with very small amounts of money and the ability to buy single or even fractional shares.

You'd have to do the framing yourself. But that's the kind of thrifty approach that provides more education than a fancily clad stock certificate.

A similar gift gambit is giving share certificates that are no longer of any stock-market value. Such shares can be found at many places, including eBay.com, at very low prices -- sometimes under $5 for a certificate.

An old certificate helps educate a kid about the history of investing. Many hearken back to the industrial age of mining and rail, something kids surrounded by bytes ought to know a bit more about.

If you wanted to instill a bit of history along with a lesson on the volatility of capitalism, you also could get certificates of headline-making defunct or no-longer-public companies. Among the most popular: Enron, Lehman Brothers, Bear Stearns and Chrysler. Oldstocks.com lists Lehman share certificates at $99, compared with 11 cents that the bankrupt company's shares trade for on the so-called Pink Sheets, a very lightly regulated marketplace that includes companies of questionable prospect.

If you think stock certificates teach a bit too much speculation, the venerable U.S. savings bond is closer to the thrifty nature of our times. Plus, Uncle Sam could use a few extra bucks.

My father would give us savings bonds for Christmas when we were young. He did this through times of plenty and lean, instilling in us the importance of saving money. That doesn't mean that I didn't go nuts on credit cards during my college years (I did), but my sense of savings meant paying all that off as quickly as possible and I've been debt-free for more than 13 years.

Savings bonds now come in two basic flavors: I bonds, which have an inflation-protected rate of return, and EE bonds, which have a fixed rate of return. The rates for the two bonds are set on May 1 and Nov. 1 each year. As of November, newly purchased I bonds are paying 3.36%, while new EE bonds are paying 1.2%. You can learn more about how to buy and give savings bonds at TreasuryDirect.gov.

Oldie but Goodie

In our techno world, we can overlook simpler ideas, such as an old-fashioned piggy bank. No surprise, expensive coin-recognition gizmos exist. But the idea of putting coins in a pretty piggy of the old-school variety gets the idea of saving money across more effectively.

A Winnie the Pooh piggy bank (Piglet too busy?) costs $6 at Walmart.com.

As money becomes more and more electronic (credit cards, debit cards, toll cards, transit cards), knowledge of real money may become more fleeting. Does that matter? I think so.

There's something important in the tactile relationship with the coin and bill. Maybe if the financial wizards had a better notion of what all those zeros on their screens really amounted to, they wouldn't have taken such foolhardy chances.

Write to Dave Kansas at dave.kansas@wsj.com