With Christmas being a few days away and I wanted to give some gift ideas for your kids. Are you a last minute shopper or procrastinator? Still trying to figure out what to get your kids for Christmas?
1. Financial Books
How about buying them these six – yes 6 – age appropriate financial books?
- For ages birth to 4 – Money A to Z
- For ages 5 to 8 – A Chair For My Mother
- For ages 9 to 11 – The Secret Millionaires Club
- For ages 12 to 14 – The Young Entrepreneur’s Guide to Starting & Running a Business
- For ages 15 to 17 – The Money Savvy Student
- For ages 18 & up – I Will Teach you To Be Rich
2. Open a 529 college savings plan
Another more practical gift for your kids would be a 529 college savings plan. Shortly after the girls were born, we started 529 plans to get a head start on saving for college. So many people have concerns and questions about 529 plans. We essentially look at the 529 plan like its a Roth IRA – but note: it can only be used for educational purposes only.
- It’s money you have already paid taxes on
- Grows tax-free
- Invested in mutual funds
- Earn interest
- You pay no taxes on it at withdrawal
3. Open an UGMA savings account
What is a UGMA savings account? The Uniform Gifts to Minors Act – is an custodial account (managed by an adult) that allows you to save on behalf of a minors for education, car, or any other purposes that can benefit them without the time-consuming and expensive establishment of a trust.
It will be relinquished to the girls at the age of 21, but that’s 15 years and 20 years of diversified investing that will set them both on a path for a strong financial future.
Key benefits of a UGMA savings account:
- You can contribute as much as you want
- Family and friends can make contributions
- Anyone can open an account
- There is no penalty if not for college