Sure, cash in an envelope is rarely turned away. And gift cards are as hot as ever. But maybe you’re looking for a more sophisticated currency-related gift. Unfortunately, the 0.1 percent rate on savings bonds might not be the sexiest thing under the tree.
But don’t give up on investments as presents! A gift that actually builds wealth over time can be a great surprise and a huge asset in the long run. Here are seven ways to give money that keeps giving over time.
People have been gifting shares of company stock for decades. It’s a fun way to give money that, statistically, will appreciate over time—in a way that the recipient can easily track and understand. Things have changed a bit, though: Nearly all companies now only issue shares electronically. This means you have to either give your loved one a not-so-pretty printout of the trade details, or pay a fee of around $50 to the parent company for printing and framing. Nonetheless, stocks are a fantastic way to show money lovin’ in a personalized way. Some great stocks include Disney or Mattel for kids, Apple for gadget geeks, International Speedway for NASCAR aficionados and Constellation Brands for oenophiles. Buy through your broker or a site like ShareBuilder.com.
529 Plan Contributions
529 plans are tax-friendly, state-sponsored savings tools for higher education. Ask a young person’s parents whether they already have an account that you can contribute to, or buy gift cards through LEAF College Savings. These gift cards can be redeemed and transferred into any 529 plan in the United States. And if the kid doesn’t already have a 529 account, anyone can set one up on his or her behalf.
Session With a Certified Financial Planner
An initial session with a financial planner can be a great investment. It will set the receiver’s life on track, as he or she will work with the planner on short- and long-term goals and dissect current investments. Ask around for recommendations near the recipient’s home, or use the Financial Planning Association’s search tool. (Many planners work with clients remotely, too.) Garrett Planning Network is a national group of planners available on an as-needed basis, and, unlike many planners, Garrett Planning Network does not discriminate on income or assets invested.
Online Financial Tools
Investors of all levels are flocking to the growing number of Internet-based financial services that, for a modest monthly fee, help with budgeting and/or investment goals. Check out LearnVest (charges fees starting at $49 per month), which offers an initial session with a planner to help with setting goals, getting out of debt and working toward retirement. Also look into similar services like Betterment and Wealthfront, which provide low-fee, automated investment platforms.
Moonjars (starting at $7.95 at Moonjar) are cool, kid-friendly, three-part piggy banks with color-coded sections designated for saving, spending and sharing—the trinity of a healthy financial life. Alternatively, create your own three-part savings receptacle with empty jars, water bottles or vinyl wallets. (There are lots of cute ideas on this Pinterest board.) Then complement the nouveau piggy bank with some good old-fashioned money to jump-start the venture.
Bank Account and a Deposit
If you know a young person without checking and savings accounts, consider opening one in his or her name and making a deposit. For kids ages 10 and under, a simple no-fee savings account is best, and consider linking it to a parent or guardian’s account. Tweens and older should have checking accounts with online access.
Education will make a gift go further. Include an age-appropriate financial literacy book with any of the aforementioned presents. I recommend The MoneySmart Family System: Teaching Financial Independence to Children of Every Age ($12.18 at Amazon), Kids Making Money: An Introduction to Financial Literacy ($5.51 at Amazon), Saving for the Future: An Introduction to Financial Literacy ($5.95 at Amazon), The Last Gold Coin ($3.99 at Amazon), The Teen Girl’s Gotta-Have-It Guide to Money ($8.06 at Amazon) and The Lemonade War Series (prices vary at Amazon).
PA529: Get an online enrollment savings plan fee for $50.
LearnVest: Check out LearnVest coupons.