Every year around this time, I try to make helpful holiday gift suggestions for the younger people in your family. Toys, clothes, and digital games rate highest with young people. But the holiday season is a great time to spark new interest in money matters – or, at the very least, create a gift that will last longer than just one season.

Now is the time to get started, since many of these require advance planning or ordering.
529 College Savings Account Every year this easy gift tops the list. Open a 529 College Savings Plan for your child or grandchild, starting as an infant. The money you contribute grows tax-free for college and can be used for school in any state. Most plans offer simple “age-based” investment options, more aggressive for young children and growing more conservative as college nears.

You can invest in any state’s plan, but some states (including Illinois) offer a deduction against state income taxes for your contribution. To learn more and get direct links to top-rated plans, go to www.SavingforCollege.com. Once the account is opened, you can continue to contribute on birthdays, holidays, and special occasions. You can gift up to $16,000 per year for each child – or combine 5 years of the allowable gift all at one time! But this is not just a tool for the wealthy. Most plans let you start with as little as $100.

Gift of Stock Shares Introducing a child or grandchild to sensible investing is a gift that should start early, pointing out that favorite sneakers or toys or clothing brands are likely created by a publicly-traded company whose shares you can buy.

Stockpile.com is still my favorite way to play this game, although they recently changed to a subscription model. For $4.95/month you can open one adult account and 5 kids accounts, where you can buy fractional shares of almost any stock or ETF, or even cryptos if you’re still so inclined! They make it easy to give an emailed “e-gift card” that allows you – or the child – choose a stock to buy.

The account itself is easily opened as a “custodial” account for a minor when the gift card is redeemed. But one warning: When it comes time to apply for financial aid for college, money in custodial accounts for the child weighs far more heavily against the family in the financial aid formula. So, this should be viewed as an investment teaching tool instead of a college savings plan.

You can also open a custodial brokerage account at Schwab, Fidelity, or most major brokerages at a very low cost. The benefit of Stockpile is the online teaching tools, that help you create knowledge as well as money!

MoneySavvy Piggy Bank My favorite gift for your youngest children or grandchildren is the Money Savvy Piggy bank – a translucent plastic piggy bank that has four chambers: Savings, Spending, Donate and Invest. It teaches the child the value of accumulating money – and making plans for how to use it. It’s available in 5 colors, so each grandchild can have one. Get it at www.MoneySavvy.com for $21.99. Or find it on Amazon. Order now for holiday delivery.

Gift of Savings Bonds Series I savings bonds have been making headlines lately with their eye-popping rates. If you purchase now, you will receive 6.89% for six months. After that, the rate will be readjusted based on new rates set May 1st and November 1st, reflecting inflation adjustments. These are a long-term holding, since penalties apply if you take the money out before 5 years. Buy them through your TreasuryDirect.gov account and hold them in your “gift box.” You’ll need the recipient’s Social Security number. At TreasuryDirect.gov search “gifting bonds” for a video explaining the process.

The Gift of Organization Here’s a gift for your adult children – the gift that makes it easier for them to help you in case of emergency. Download my free Personal Financial Organizer form using the link in the top right corner at www.terrysavage.com. You don’t have to tell your adult children “who gets what” – but you should give them a guidepost to finding your financial accounts, passwords, and advisors if you’re unable to act for yourself. Let your trusted adult child know where you have stashed your completed form – and print out blank forms for each family member to do the same.

Here’s wishing you a financially sensible holiday season. And that’s The Savage Truth.