Monetary Holiday Gift Ideas

Posted on 26. Nov, 2005 by in Humor, Saving & Investing

Jeff Opdyke over at The Wall Street Journal brought up the idea today that children are spoiled during the holiday season with an over-abundance of gifts and money – so much in fact that most kids don’t even end up playing with that toy from Great Aunt Betty. Since the child won’t likely be able to tell that he/she only received 10 presents instead of 15, people who feel compelled to give gifts but don’t want to give too much can opt for long-term “financial gifts.” He proposed two gifts to give this holiday season:
Series EE Bond

First, ask the parents whether they’ve already established a college-savings account or a custodial account in their child’s name. If so, tell them you’d like to contribute. That’s a simple cash gift. You can still give the money to the kid, just include a note that says, “These holiday dollars are specifically for the college account Mom and Dad have established for you.”

If the parents don’t have such an account, there are two other options:

1) Buy a savings bond– The minimum purchase is just $25 for the paper version of a $50 Series EE bond. Series I bonds are inflation-protected, and available in paper version, too, but start at a minimum of $50.

If you’re really thinking ahead, put the bond in Mom and Dad’s name with the child as beneficiary; that way, parents might redeem the bonds tax-free for qualified education expenses at some point. If you do it this way, do not name the child as co-owner. You can buy the paper savings bonds from most banks and credit unions. If you want your gift to go further, some banks offer a “bond-a-month” program, in which your chosen recipient receives every month a savings bond in whatever denomination you establish.

2) Give a gift of stock– ShareBuilder.com, an online brokerage firm, offers gift certificates for as little as $25 that allow a child to buy stock in any public company. (Go to the “Retail Store” link under the “Products & Services” tab on the ShareBuilder home page.) Mom or Dad will have to establish a custodial account in the child’s name at ShareBuilder.com, but that’s easy, free and accomplished quickly online.

And just like that, you’ve cut down on the plastic clutter at Christmas, and given a kid a profoundly more meaningful financial gift than a card filled with cash.

However, I know there are more ideas than that. Please feel free to add your comments and ideas on other gifts that we can give to the child who has everything… literally.

Holiday, Gifts, Gift Ideas

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