Got an email recently from someone and almost overlooked it as the title said something about asking my opinion on savings bonds, zzz… Fortunately I pushed through, and hidden inside was a lovely question about how to honor some gifts given to the person around 30 years earlier :)
Here is the note below, followed by my kinda-sorta-could-be-good-advice afterwards? I’ll need your help coming up with more ideas for her please!
Hey J Money,
I’ve been mulling over a money question now for the last year and haven’t gotten far. I was reading your blog and thought, “What the heck, I’ll see about getting an outside opinion!” from you and/or the Budgets are Sexy community.
My great-grandparents bought me 30 year Series EE savings bonds for my birthday, Christmas, etc. for the first two years of my life. They’ve been sitting ignored in my safe for the last decade and I noticed last year that they were reaching their maturity dates. The last one matures this year and I need to cash them out. I looked up the values and, all together, the bonds are worth a bit over $500.
So, here’s my dilemma. My great-grandparents were pretty fantastic people who I respect a lot. They purchased these knowing full well that they wouldn’t be around when I was an adult, much less when these bonds matured. I feel like I ought to earmark it to do something significant or symbolic or something with it other than tossing it in our checking account. Any thoughts?
I know you have no idea what my financial picture looks like or even if it matters. But, for the record, I’m happily married for 8 years to my high school sweetheart, have two great daughters (3 years and 5 months), own a home that we put 20% down on, no debt other than $12,000 for my husband’s masters degree (he graduated in May), 6 month emergency fund, and socking away money every month for retirement and our kids’ college funds.
Would love any feedback you have!
Sincerely,
Courtney
Aren’t her great-grandparents the best?? I told her I did the same thing years ago with all my savings bond gifts from my g-parents (6 total) and ended up putting them towards maxing out my Roth IRA for the year. Something I’m sure they would have been proud about :)
Here’s actually a snapshot of them from one of my very first blog posts:
[If you go to TreasuryDirect.gov you can look up and track all your old paper bonds too FYI. Though I brought mine to a local bank to cash in instead of the site as it looked a helluva lot more complicated and time-consuming. (Though great for research!)]
I told her I also thought it was smart to convert them over too just in case they ever get lost or stolen/burned up in a fire one day (they are made of paper, after all!). Much better to keep that $$ electronic or stashed/invested somewhere vs in paper notes.
As for ideas on how to honor her great-grandparents? I could only come up with two, which is why I need your help after you’re done reading this :)
- Re-invest the money into the stock market so it continues to grow – but much faster
- Re-invest the money into something for HER. Like further education or a passion or something special that she could even do with her family together. We tend to be pretty obsessive with saving and budgeting on this site, so this would make for a perfect opportunity to do something they’ve always wanted to do but haven’t yet.
Although now that I think about, her grandparents kinda already got their wish, didn’t they? To have a smart, thoughtful, and financially-conscious great-grandchild on their hands? I mean, who spends time going out of their way to write people on the internet for tips?? That speaks volumes in itself! ;)
So well done, Courtney. I’m sure they’re smiling down pretty hard right now. Let’s see what some of our smarty pants readers here offers up idea-wise, but however you proceed they’ve already accomplished their mission. And there’s nothing wrong w/ just sitting on some cash too! Cash = options = freedom!
Here’s to grandparents and savings bonds everywhere :)
*****
PS: Do you think one day grandparents will give out bitcoins as gifts?? They’ve stopped selling paper bonds at banks since 2011. You can only get them now at the U.S. Treasury’s website (TreasuryDirect).
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We cashed my wife’s bonds in early at the bank so we could put the money to better use in the stock market. We didn’t peg the money for anything specific, just added it to the general retirement fund. As far as having a purpose for your funds, consider doing the money into your kids college savings. I’m sure the grandparents would appreciate that. Or I’d buy something memorable as a keepsake. Something special to you both.
This is a very sweet post. Savings bonds used to be a very common gift for children because eventually they will be able to use the money for a necessity. If I were a grandparent purchasing savings bonds, I would imagine them being cashed in at maturity and used for college. Since it sounds like you guys are A-ok in terms of education and finances, I bet they would be very happy to see you cash them in and use the money to enjoy your family. Maybe put it towards a vacation or a fun-filled day out and about. Just my two cents. Enjoy!
Mad Money Monster
She clearly loves her children very much, so perhaps take some of the money and buy them savings bonds (or invest for them in something that will grow more effectively). I’d then invest some (I’d pay off the debt first, but that’s just me), and then take some (maybe $50?) and have a family experience to honor them, creating a memory that involves them even though they’re gone.
That’s a good idea to continue them forward with her own kids :)
Since her children as so young I would do two things – If she journals or does scrap booking I would find a picture of the gift givers – write a note about them–good memories, what they taught me, etc including a note about the bonds. Then I would record what I did with the $.
What would I do? I would but 1/2 in college funds for kids and I would take the other 1/2 and have a date day/night with my husband. Having young kids is hard and a nice day or evening with just the two of them would be a treat that I am sure great grandparents would approve–as time spent on your marriage is time well spent. Sounds like this family has a great start!
I like it :)
The thing that I love about the idea of cashing out and investing in the stock market (Vanguard Index Funds of course) is that it gives you all the time in the world to sit back and think about what you would actually like to do with it. There’s no need to decide right away. What if 10 years from now that huge special idea finally hits like a sledge hammer and you know without doubt that this is what you needed to do with the money? Great, you’ve been growing it that whole time and now have more to work with. And just think, what if you never end up using it but eventually hand it down to your grandkids, talk about a legacy to your ancestors.
Consider putting the money towards your husband’s student loans. Some savings bonds are tax exempt when used for educational purposes. Assuming you have four $50 bonds, you’ll have $300 in taxable interest income. Always nice to keep the money for yourself vs. shelling out in taxes :)
Why not use the money to put towards the kids college? Maybe a 529 plan. Or, invest it in a broad market index fund and give to the grandchildren way down the road. Could build up to a sizeable amount by then…
I was thinking the same thing, pass the money onto your kids and help them pay for some college in great grandparents name.
Especially since I believe EE bonds were specifically for education and could be used for that purpose tax-free upon redemption. I did that with (most) of mine from my grandparents.Because she has young kids, I’m wondering if they’re rolled over into the 529 if you can avoid taxes that way, too? Ignorant about the tax implications with this specfic transition. I know if you cash them out for cash, and not to apply to education costs, they are taxable.
Also, side note, even if they burn, if you have the serial number or other identifying information, you can still look them up online, and I believe redeem them, even if you don’t have the paper in your hands anymore.
Ooooh i didn’t know that! how do you prove you own it though? cuz they have a record of them all online?
Some basic KYC info plus month and year of purchase. I didn’t need to do this, but would have been easy enough to remember as Grandpa always bought in my birthday month. :)
https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eereplace.htm
Agreed, AE and Freedom 40 Plan! She could let the children know it’s a gift from their great grandparents, and let it grow into an even bigger gift for their lifetime.
I’m usually quick to jump on the obvious like throw it on debt or kids education savings but I feel like if that something special needs to be done with the money. Maybe put it towards a vacation with family, perhaps a trip going back to where grandparents were from? Or a big family night out-something you wouldn’t normally do. I suspect if you’re paying down dept and contribute to savings Regularly, special family dates aren’t a regular event. Splurge on a weekend staycation with kids or all 4 do dinner, movies etc…make a memory you’ll all remember. Let’s be honest, 500 isn’t a huge amount of money and while its tempting to throw it on the debt ot whatever I feel like doing something together and being able to talk about ‘that time we got a hotel and did cannon balls in the pool or ate a fancy dessert at dinner” goes a lot further…. Also maybe buy something rather than an experience, something you’ve wanted like a nice camera to capture memories or adoption fees for a family pet. I just think it should be more special than getting lumped into debt repayment or kids savings.
I like the idea of putting it towards kids college education fund. Or you could reinvest in something and pass on to your kids many years down the road. It would be kind of cool to keep the money passing down from generation to generation.
When my grandma passed me some money, I used it for three things: First, we paid off quite a bit of debt. My grandparents avoided debt wherever possible. Second, we made some improvements around the house to directly provide fun space for our kids. Third, we used some of the money to purchase our camper, which has provided years of joyful memories for all of us. For the last two, family meant everything to my grandparents, so I think that they would be proud that we used it to create something that was long lasting and that would create memories that will hopefully last a lifetime.
I like the camper idea :)
My grandparents did something similar, with the idea that I could cash out the bonds to use the money for college. They ended up living much longer than they expected so I couldn’t cash them until my late 20’s, after my college loans were paid off.
I also looked for a way to honor their memory. At the time, I didn’t have much saved so I put the money in my savings for an emergency fund. I figured anything that improved my finances would be approved by them. Years later, I used the money to help pay off my mortgage — also something they’d approve of.
If you don’t need/want the money for yourself, here are my suggestions:
1. Set up 529 accounts for your kids, so you can pass along their kindness
2. Donate the money to a cause that your grandparents cared about
3. Stick it in savings for the time being. In time, something may resonate with you and this way the money will be available.
My mother has given us kids savings bonds a few times since my dad passed away. He purchased them for us over the years (we didn’t know about it) and we’ve gotten them near maturity. We just got a “distribution” right before Christmas and it was pretty sizable. We know Daddy did this because he wanted to take care of us – no strings attached. My mom only wants us to use the money on something that makes us happy. I’m putting the funds towards two different things – a bucket list vacation (nothing extravagant, just somewhere I always wanted to go) and then updating my will. I wouldn’t call the will business fun but it has been weighting on my mind. I have two kids and I want to make sure they’re taken care of when the time comes.
I think your father would be proud :)
Take the money and have a fun weekend with your family. Living and enjoying family, I can think of no better way to honor our past love ones.
The amount is not significant or life changing, but the memories could be.
It s too bad she didn’t cash them out in december or her husbands education bills didn’t creep into January, you can use these tax free for education. Since money’s fungible she could even say the money was used for education when telling herself it was used for the meaningful option of her choice. I don’t remember what I used my bonds from childhood for, my grandparents were still alive at the time. If I had it to do again I would have used them for my own education. Tax benefits and a major impact on my life.
I’m going to go totally against the grain here and say don’t use the money to put to your husbands student loans or your kids college funds. Your Great-Grandparents gave this as a gift to YOU and I think you should use it for YOU! It sounds as if you have your finances sorted and while you could add it to savings or retirement funds wouldn’t it be great to have something to remember them by rather than an extra few dollars in those accounts?
Between me and my sisters we have bought the following things with sihnificant gifts/inheritance from grandparents (all of these will last a long time and give us joy, may even be passed on to future kids): nice jewellery, art work*, special furniture, kitchen aid.
*I bought a painting with inheritance from my Nana that I haggled down to 80% off which is the exact amount she left me! I know my Nana would love my bargain hunting and I think of her whenever I see it (daily). Sure, I could have invested it and bought a Picasso in another 30 years but I’d rather have this painting now.
Haha… I did NOT see that one coming :)
Our three children had bonds. We cash them in and reinvested them. I like that idea the best, the power of compound interest, boom!
I’m not sure how to use the money, but I like this post because it reminded me to check on the savings bonds I got from my grandparents years ago.
yes! do it!! then write a post on what you decided to do, and then one of your readers will do the same thing, and then theirs too and then theirs and theirs and theirs… Magic :)
Since Courtney seems to be in good shape financially, here is a crazy idea for the savings bonds: Plant trees. If you have your own home, plant them there. If you can pay for a tree(s) in a public park, then do that. My grandparents planted fruit trees (mango trees) – one for each grandchild – and now that they are gone, there is something special about gorging on those mangoes. You’ll get environmental karma and something solid that you can visit, sit in the shade off, eat fruit off with your children for years to come and pass on family stories.
Okay, so this is my favorite idea out of ALL of ours, man… SUCH a great idea!!!
If you don’t have one already, I would pick out a nice frame and a picture of them to have in the house. Something to keep their memory alive.
With that out of the way, I personally see cash gifts from great grandparents as their way of providing a little future financial security. Since you seem to be doing alright, perhaps you could tie up some loose ends. Do you have a will? Is it up to date? Could you have a meeting with a fee only financial planner?
If everything is perfectly tied up, I would use it for a little self care. Maybe go for a massage. Replace your winter coat or boots if they need it. Take a yoga class or a snorkelling seminar. At the end of the day, they would want to know that you’re happy and well looked after.
Ohhhh – I love Mrs. BITAs idea of a tree! I also like the idea of using it in a 529 or kids related fund for their schooling or future. How cool would it be for Courtney’s great grand parents to be able to gift another generation they never had a chance to meet? Either way, I definitely agree with J – cash them in before you lose track of them or the get ruined. I have 20 in my home safe that I keep meaning to cash!! Thanks for the reminder! :)
If it were me, I’d split the money in half. I’d take the first $250 and spend it wisely somehow. Others have come up with some great ideas – husband’s college debt, mortgage debt, college savings for kids, retirement contribution, vacation. It might take me a while to figure out what to do with that $250.
But the second half of the money, I would suggest figuring out some creative way to give that money away:
->Maybe you donate it straight to a favorite charity (and negate some of that earned interest tax, if you itemize your deductions).
->Maybe you buy ten $25 gift cards to your local grocery store, and go hand them out to strangers. Or maybe you give those gift cards to the clerks and tell them to use them when someone is obviously struggling to figure out how to pay for their groceries.
->Maybe you decide that this year, everyone in your extended family gets a small gift for their birthday or Christmas. Or everyone you normally give a gift gets a small boost in your gift-giving budget.
->Maybe you buy a homeless guy a burger. And fries. And a drink.
It sounds like you are a pretty solid planner. I don’t think you’ll go wrong any way you go.
“Maybe you buy ten $25 gift cards to your local grocery store, and go hand them out to strangers.”
Like our #GivingCards project!! –> http://RockstarCommunityFund.org
I’ve never received bonds from my parents, but I agree with J$’s recommendation of sticking it into the stock market and let it grow.
I would probably think of it as a seed that your grandparents had planted for you, and by letting it sit, grow, and develop in the stock market, sooner or later, it will sprout and become a big tree!
I agree with some other readers. It seems thoughtful to put it towards the future for her children by putting it into 529 plans for college.
Awww, this is so sweet. My parents got bonds when I was two and we cashed them out for college. I think they purchased them for $20 and the return was about $350.
I used the bonds for school, but if I were to suddenly receive a really nice monetary gift, I’d apply it to my kids’ education fund. The lady in question has two little girls, and I’m sure the great-grandparents would be tickled pink knowing they established a financial foundation for their great-great-grandchildren. Just an idea!
What about doing something with it that will continue to give back to the whole family? Maybe take a photography class and capture all those poignant moments? Take a cooking class with hubby and make a point to spend time together in the kitchen as a family after. I really like the idea of attending a Weekend To Remember marriage conference-a happy, healthy marriage is really a gift that keeps on giving, and what a legacy for the great grandparents to have made a great marriage even better?
There are lots of great ideas listed by others, too.
“Weekend To Remember marriage conference” – that sounds interesting, never heard of before?
This is a good experience kids should be told. Kids can learn gratitude. Mother can buy a small gift to her grandparents to show gratitude. Showing gratitude to others is the cornerstone of success. It is also a good example to teach kids long-term investment.
Considering her financial situation, reinvestment is not a bad idea.
That would actually be an interesting idea — having the KIDS decide what she should do with it maybe? and everyone talk about it and learn/share in the decision making process?
I think the great-grandparents who gave this money, must have been themselves savers. If they had wanted to give something tangible, they would have done so at the time. As it was, they gave a gift to the ‘future, grown-up, 30 year old’ Courtney, in the best way they could. I think they will just have hoped that the money would have been used wisely.
It sounds like you don’t ‘need’ anything special at the moment, so invest it.
great post. I agree with you J.Money, her g-parents are probably already proud of her, seems like a pretty awesome chick! If she invests in stocks, like actively, maybe she could pick a stock from a business that represents here values. Or a stock from a company that donates some of their profits to a charity that she thinks speaks to the type of people her great-grandparents were. So some sort of combo of investing and charity might work to honor them.
When I was broke and in college, my dad would occasionally gift me some money and it would be “for anything BUT bills”. As in, go do something you normally wouldn’t do with this money because it’s “extra”. I always apreciated that because it took away the stress of getting to do something fun, and I always had bills covered (barely) anyway.
I’d recommend something like that. Use it for something you wouldn’t normally do and in a way that honors them or would remind you of them. Maybe a piece of art, or a family photo shoot, or something outside the box that you could still have a great memory about what they were able to provide for you with their gift.
Good luck!
I’m going to steal that idea from your dad and use it for my kids later – love it :)
I would suggest putting the money into two accounts for the kids and then when they get old enough, use it to teach them about responsible personal finance and giving back.
I like that idea :) Kinda like that old movie Brewster’s Millions when they had to spend all the money within a set amount of time!
My wife had a couple hundred dollars from her grandparents. We cashed them in to help pay for our house. The trick is waiting until after the next disbursement date. That meant we waited a few months for it to gain a little more money since many of them weren’t fully matured yet.
In awe of this community. Look at that list of GREAT ideas, in 24 hours. Wow, you all Rock!
‘Nuf said.
I agree!
What a kind thing for her great-grandparents to have done. I would most likely re-invest the money, but would consider using part of it for a fun family thing that would involve great memories.
My savings bonds go into savings / Roth. I used savings money for the down payment for my house. I used to just go to the bank 1x a year but decided I’d rather earn the interest / market gains vs letting it sit idle past maturity.
I had bonds from 86 and didn’t have anything significant happen that year….then I read an article that there was a special promotion with 7% interest early in the life of the bond. Sweet deal for me in 2016.
I love the tree idea!
I agree to not use it for the debt, and was going to suggest a pay it forward for her kids 529 with some of it. As noted her great grandparents wanted her to have the money, so I do think a treat for her / the family would be nice.
It sounds like she is a thoughtful caring young woman, and I’m sure her relatives will be honored because she is putting thought and planning into this.
I am in a similar situation. I have a bond from my grandfather that will mature this year, I believe around $1000. I am trying to decide what to do with it, but I also feel that I should honor my family with it as well. My grandfather grew up in the depression, so I know he would be proud of me if I put it toward debt. But I feel like that is only a small chunk of our debt so we would still be in the same boat, trying to pay everything off. I graduated without student loans and my husband has under $5000. Our current high debt is on our vehicles. Anyway, should I put a chunk towards a debt and use some for something that honors him? That is what I will probably do, but its great to hear other opinions.
Lots of great ideas here in the comments if you haven’t already read them :)
I would use it for something that you can enjoy now and then pass on to your daughters. A great pair of diamond stud earrings you can wear now and then give one diamond to each daughter to be put into a necklace or ring when they reach a milestone like graduation, marriage, etc. would let you enjoy their gift and also pass it on. If you’re not into jewelry, you can do art, furniture, cookware, anything as long as it is heirloom quality.
That’s a cool idea!