9 financial gift ideas for children and grandchildren

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A holiday gift for your kids and grandchildren that won’t require you to worry about supply chain disruptions and delivery delays: the gift of teaching them about money.

To help you with some ideas – whether your children or grandchildren are six or 26 – my “Friends talk about money”The podcast co-hosts and I just posted an episode on our favorite cash gifts and I’d like to share a few here. (You can hear the episode wherever you get your podcasts.)

By cash gifts, we weren’t necessarily talking about handing out money. Instead, we were suggesting a variety of ways your children and grandchildren can become smarter when it comes to saving, investing, budgeting, and debt.

“Financial education is huge,” said Pam Krueger, co-host of “Friends Talk Money,” founder of the Wealthramp financial advisor audit service. “It gives us, as grandparents or aunt, a way to start conversations about the whole concept of planting a seed, watering the tree and watching it grow. “

Read also : 5 financial movements to make before December 31

Terry Savage’s Favorite Gift

In the podcast, we also have recommendations for parents and grandparents who want to help pay for children’s college education. In fact, “Friends Talk Money” co-host Terry Savage, a renowned personal finance columnist and author, has said her “all-time favorite gift” is the gift of a college education.

She noted that the best way to do this is to set up a state-administered, tax-sheltered 529 Education Savings Plan.

“The money deposited into these accounts increases tax-free to be used for college in any state,” Savage explained. “And the great thing is that you can make additional contributions for each birthday or holiday, helping the fund grow over the years. “

The IRS allows you to put up to $ 15,000 in a 529 plan this year without any pesky consequences on gifts or estates. Some states also offer tax relief for 529 contributions.

The best website to search for 529 plans, said Savage, is the independent resource for parents, Savingforcollege.com. It classifies 529 plans for each state.

One caveat: If you open a 529 plan as the plan keeper for a grandchild, it could negatively impact financial assistance for the child when tuition bills are due, noted Savage.

I opened 529 plans for my two sons when they were little and I’m so glad I did. The savings they have accumulated have helped my wife and I a lot to pay for the tuition fees of the two colleges.

Also see: I bought my house for $ 30,000, and now it’s worth almost $ 3 million. How to avoid a massive tax bill?

Incidentally, you can also buy what is called the ““College Gift” gift card at around 3,000 retailers across the country, including Target TGT,
+ 0.84%,
and online. It allows you to put money into a 529 via the gift card.

Teach children to invest by buying a stock

Savage’s second favorite gift for kids and grandchildren: the gift of investing in stocks by buying stocks in companies they know.

The Stockpile.com website is designed to do just that. With as little as $ 5, you open an account for a miner and designate the purchase of over 1,000 stocks and exchange traded funds (ETFs) by sending a $ 1 to $ 100 gift card. “Or the child can choose the stock when you send the gift card,” Savage said. There are no trading fees.

Stockpile, Savage added, also offers a “delicious online tutorial” to introduce children to the principles of investing, risks and rewards.

A bonus: You could train yourself by learning from your child or grandchild about companies and sectors of the economy that they know better than you.

Tassels and piggy banks

An alternative gift for a teenager or twentysomething, suggested by Savage, is the Acorns.com app and its “Round-Ups” feature. When the child purchases something with a credit card or debit card, the app rounds the price to the nearest dollar. Then, once that extra cash comes to $ 5, Acorns places it in a diversified ETF for the kid.

For the younger ones, Savage recommends the “Smart money boxCreated by mom of two, Susan Beacham (it costs $ 21.99; $ 24.98 with a family activity and coloring book too).

“This is a four-chamber piggy bank and the chambers are clearly labeled Save, Spend, Donate and Invest,” Savage said. Krueger added, “It’s the kinds of things kids remember, because they touch it and feel it.”

Money Savvy Piggy Bank

MoneySavvy.com

I am especially happy to see that “Donate” is one of the options of Money Savvy Piggy Bank, as the bank introduces children to the idea of ​​helping the less fortunate.

Savage also enjoys the online savings advice and financial education for young children at the Fitzsimonscu.com site of the Fitzsimons credit union.

Don’t miss: Tesla’s $ 1,900 Kids’ Cyberquad EV is already sold out, restocked and sold out again

My 5 silver gift ideas for children and grandchildren

Five financial gift ideas for children and grandchildren that I offer on the podcast:

Additionally, financial advisor Lazetta Rainey Braxton recently wrote a helpful article on Next Avenue for Gen X parents, with ideas for help them raise financially savvy children.

Also see: How to become a multimillionaire by saving for retirement for just five years

According to a recent Wells Fargo WFC, only 9% of Americans aged 55 and over use vacation get-togethers with family members to talk about money.
-2.37%
investigation. Maybe this is the year for you to do it.

Richard Eisenberg is senior web editor for Next Avenue’s Money & Security and Work & Purpose channels and editor of the site. He is the author of “How to Avoid a Mid-Life Financial Crisis” and has served as the personal finance editor at Money, Yahoo, Good Housekeeping, and CBS Moneywatch.

This article is reproduced with permission from NextAvenue.org, © 2021 Twin Cities Public Television, Inc. All rights reserved.

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