Seeing a child’s eyes light up when they receive a new toy, or witnessing a teenager getting excited about a gift card to their favorite store can be rewarding, but these moments are fleeting. Next year, the toys are forgotten about, and the gift cards have long been spent.
If you’re looking for a creative holiday gift idea that’s longer-lasting and increases in value over time, consider giving something that sets a young person you care about on a successful financial path.
These gifts can help secure their futures while helping them learn about how to save and invest. They can get a head start on saving for a car, college tuition, or a down payment on their first home.
Whether you’re a parent, grandparent, relative, or a family friend, consider these gifts that keep on giving.
Stock Certificates
Gifting a share of stock is a fun way to show a young investor how the stock market works while giving them a piece of a company they adore. Most companies no longer issue paper stock certificates, and it can also be a hassle to transfer your stock to someone, but there are several ways to give this gift in a way that will still delight the recipient.
A company called Give a Share allows you to buy paper versions of a stock, and you have the option to upgrade to a premium frame. Popular stocks you can buy include Disney, Apple, Etsy, Nintendo, and Tesla. Keep in mind that you’re paying significantly extra for the paper certificate, sometimes double the face value. Weigh the benefit of a visually impressive gift against the value of buying the digital version.
Computershare has the advantage of allowing you to buy the stocks directly from the issuing company and easily gift them to your intended recipient. You can also purchase fractional shares, making it easy to give a fit in a whole dollar, even amount.
Savings Bonds
Backed by the U.S. Government, savings bonds are one of the safest investments you can gift. The most common types are called Series EE bonds, and they’re purchased at a discount to their face value. They accrue interest over time, and the amount of the discount and the interest depends on the issuer and the maturity date.
When purchasing a savings bond for a minor, there are a few hoops to jump through. You’ll need to open a Treasury Direct account with the U.S. Treasury and provide the recipient’s legal name and Social Security Number.
These certificates can be printed and gifted, making them a fun gift.
529 Contributions
A 529 Contribution is a type of college savings plan. There are two types available. One works similar to a 401k or an IRA, and the funds you contribute are invested on your behalf. When you choose the managed fund option, the asset manager considers the child’s age and automatically adjust the asset allocation based on how close they are to starting college.
The other is a prepaid plan that allows you to lock in current tuition rates, protecting you from inflation and rate hikes.
Not only are 529 Contributions an excellent way to plan for college, but they also provide an income tax break in some states.
Investing Books
Knowledge is power, and sadly, investing is rarely taught in school. If you spend any time on Facebook or Twitter, you’ve probably seen the meme that says, “I’m glad I learned about parallelograms instead of how to do taxes. It’s really come in handy this parallelogram season.”
Depending on the age of the recipient, there are different books that can indoctrinate them into the world of finance.
For children under the age of 8: The Squirrel Manifesto by Ric Edelman and Jean Edelman
When we were kids, we learned the tale of the ant and the grasshopper, and this book retells the story with a modern take. It’s a valuable life lesson about the importance of savings and delayed gratification that can help set the stage for a young person’s future success.
For elementary and middle-school aged children: The Kids’ Money Book by Jamie Kyle McGillian
This book combines practical advice with engaging illustrations. Kids will learn the difference between needs and wants, how to become an entrepreneur, and even the importance of donating to charity.
For teens and young adults: Why Didn’t They Teach Me This in School, Too? By Cary Siegel
This book contains 99 personal money management principles that are valuable at any age. It’s straightforward and easy to understand. Even if the advice doesn’t apply right away to a younger person, it’ll stick and be applicable later in life.
Personal Finance Classes
Though most people don’t relish the idea of “homework,” there are online and in-person financial seminars that can help teach teenagers and young adults how to manage money and eliminate debt while learning about personal finance best practices. These classes can benefit the whole family, and when the course is online, there’s no pressure to attend a physical venue at a specified date.
Bottom Line: The holiday season is often associated with mass consumerism. While giving material goods can spread temporary cheer, the gift of financial literacy can benefit recipients for life.
