28 Dec Great Financial Gifts for Kids This Holiday Season
Toys are definitely the number-one holiday gift for kids, with experiences that give lasting memories a distant second. What if you could give your kids or grandkids the gift of a financially secure future, though? Wouldn’t that be a gift they’d thank you for decades down the road? If you’re considering financial holiday gifts this season for the special children in your life, here are some ideas to keep in mind.
Savings bonds are great gifts, especially for younger children, as they will grow steadily by earning interest. The longer the bond is held, the more valuable it becomes. These are the only Treasury securities that can be purchased as gifts and be owned by children. That makes it a pretty smart choice for the parent or grandparent who wants to give a gift that will become more valuable every year.
College is getting more and more expensive every year, with the average cost of in-state public colleges now reaching almost $10,000 per year. Yearly contributions to a 529 college savings plan could really help to defray the costs of college when those little ones aren’t so little anymore.
529 Savings Plans work very much like 401Ks and IRAs. Your contribution will be invested in mutual funds or other products, so that they’ll continue to grow throughout the years. The money should be left untouched until it’s time for your loved one to head off to their university or college of choice.
A few things to remember with a 529: Your contributions won’t be deductible on your tax returns, but the investment grows tax-deferred. That means the distributions to pay for college costs later will come out federally tax-free. Just be sure to investigate the rules within your state so you don’t have surprises later.
This is probably one of the most popular investment choices out there, and that makes it a great option for the kids in your life. You can transfer your own stocks into their name or purchase individual stocks from a brokerage that supports gift-giving.
As an added bonus, you may be able to bond with your kids and teach them about financial matters as you watch the stocks rise and fall over the years. That education they receive may be just as valuable as the stocks themselves, if not more so.
Who doesn’t love cash? By giving the gift of cash, you may provide the opportunity for your child or grandchild to start learning about savings, bank accounts, and other financial topics. Or, if your child has a pressing need for something—summer camp, a new car, new clothes, or a trip abroad—cash could be helpful in meeting that need.
If your child is old enough to really understand the need for a stable financial future, then a trip to a financial advisor could be a great gift. Even younger children can begin to learn the value of money and the many ways they can begin now to build financial independence later in life. The more they know now, the more likely they’ll be to put good habits into place early.
If we can help you with any of these gifts this holiday season, don’t hesitate to reach out. We’re here for you!