Has the amount of toys that your kids have acquired overwhelmed your home? If you’re looking to downsize this holiday season without looking like a Grinch, we’ve got the perfect gifting list for you! This year, give the gift that keeps on giving: a new financial tool.
Since most of us focus on spending rather than saving or investing during the holiday season, you won’t find most of these gift ideas in a toy catalog. The best part is that you can do any of these at any time (no matter how behind on shopping you are!)
1. Kids Savings Account
Helping a child open their first savings account is one of life’s financial milestones. If they receive money as gifts from relatives, take them into the credit union to deposit it into their own account. Explain how when you save money, it can build up to make bigger purchases later on. Kid membership has other perks too, like a free piggy bank at account opening and earning prizes at every transaction to encourage saving. They also earn interest on every penny!
2. 529 Plan
Given the rapidly rising costs of a college education, getting started on saving for it with a tax-advantaged 529 plan is a smart way to start the new year. These plans work similarly to other investment plans such as 401Ks and IRAs in that your contributions are invested in mutual funds or other investment products.
3. Give Experiences
This doesn’t necessarily mean you have to have the experiences all planned out because maybe you want them to help decide what experiences they want to have as part of their gift. By opening and contributing to a Vacation Savings Account, you’re saying that “this money you’re getting for Christmas is for us to do something fun next year. What do you want to do?”
4. Charitable Giving
Teaching those in your life how important it is to give back is a gift for those in need, as well as a gift for the giver’s heart. What would the holidays be without sharing with those less fortunate? Give them a specified amount to give and then let them choose who they want to give to as part of their gift.
Pro Tip: Parents who are going to give gifts of money this Christmas should consider breaking your gifts into several parts. For instance, if you’re going to give someone $15, give three $5 bills. This helps facilitate the idea that you want your child to be able to spend some, donate some and then save some for later.
The holidays can be an opportune time to instill financial values in children and grandchildren. Wish lists and gift shopping can help them distinguish between needs and wants. Donations and volunteering introduces them to the concept of giving. Lead the charge when it comes to promoting financial education in the family, and go minimalist this year! Talk to Member Services today to set your kids of up for financial success.