5 Ways to Turn the Holidays Into a Savings Opportunity for Your Child

It’s that time of year when grandparents, aunts and uncles start texting, asking what my kids want for holiday gifts, and it can be hard to know what to say. It’s always cute to watch my children unwrap a stuffed animal or a loudly-beeping plastic novelty (which I might, um, “lose” the batteries for by New Year). But I also don’t want to add unnecessary clutter to my house or put catalogs in front of my kids to urge them to come up with more items to want.

One alternative to perusing the latest gift round-up is to ask for a present your family would truly value. Financial gifts can be warm and festive, too—here are ideas to make the “gift of savings” something your family is actually excited about, including the kids.

1. Explain Where the Money Will Go

One of the main reasons people stay away from giving money as a gift is it can feel impersonal. Gift-giving is a way of bonding, and loved ones want to demonstrate their connection to your kids.

You can make a money gift more personal by giving relatives an idea of what the gift is for. If you’re hoping for 529 plan contributions, this could be a great time to tell them about your child’s obsession with Yale or the private school you’re hoping to send them to next year. If you have an UGMA or UTMA account, your child will be able to use funds for any purpose once they come of age (and you can use the money for their benefit before then). Maybe you tell your relatives you prefer UGMA contributions so your child could choose to take a gap year or have a smoother launch into adulthood. 

Or, better yet, have your child write a letter describing their future dreams. This is a way to make a monetary contribution more tangible for a kid, as well. You might encourage them to think about, or write in their letter, how $25 in their 529 now could buy a textbook—and how it can grow into a larger sum by the time they’re ready to go to college.

When relatives understand which accounts you prioritize and why, they might take greater joy in contributing to a shared dream for your child’s future.

2. Replace a Gift Card Tradition

The easiest way to start a holiday savings tradition is stop exchanging gift cards. Instead of gifting money to spend, gift money to save or invest.

One advantage of an UGMA contribution is you can’t accidentally give the “wrong” amount. With a gift card, there’s inevitably either money left on the card, or the item is over the limit and the giftee has to spend some of their own cash. There’s no wrong amount for a savings or investment account, and interest or gains over time can make a gift worth even more down the road. You can open a UGMA through Fabric by Gerber Life.

3. Pair It With a Small Gift to Unwrap

For some families, the joy of watching kids unwrap gifts is an essential part of holiday traditions. That’s understandable! You don’t need to get rid of physical gifts completely, even if you want to start a new savings tradition. 

Case in point: My toddler is obsessed with the plastic shaky eggs she plays with at music class or library storytime. She genuinely would love nothing more than one of those, but it would be hard to convince her grandparents that a $4.99 shaky egg is “enough.” If the “big gift” is a contribution to a savings or UGMA account for her, it would take the pressure off of them to spend a particular amount on physical items. And then she can play with egg shakers to her heart’s content.

Depending on your child’s age and preferences, it might make sense to ask for one special physical gift to unwrap, or have fun with a selection of inexpensive ideas. Either way, you can get the double benefit of putting money toward the child’s future without sacrificing a fun experience now. Some cheap ideas for kids of different ages include:

• Stickers

• Pokemon cards

• Bubbles

• Crayons or markers

• Jingle bells or other play instruments

• Fidget toys

• Chapter books

• Magic tricks

• Funny card games

• Hair clips

• Slime 

4. Get the Kids Involved

Especially as kids grow older, it’s worth bringing them into more financial conversations. As early as middle school, kids can start envisioning their ideal college experience and learning about the role of scholarships. By high school, kids can actively make their own savings contributions from part-time jobs. 

Kids may appreciate a heads-up if holiday gifts will look different than usual. If they’re old enough to compare a heap of toys in past years to a more curated set of presents this year, some expectation-setting can be helpful. Some ideas to lead the conversation include:

• Talk about family values: If you’re focusing on simplifying your home or making more eco-friendly choices, talk about how the holidays can be part of your family’s mission.

• Show them their account: Kids may be interested to see their UGMA account balance. It can be impressive to see their account has hundreds or even thousands of dollars that may grow for the future.

• Listen to their input: Maybe they’re excited about putting money toward the future, but chances are they’ll have some misgivings, too. Are there specific presents they’re really hoping for? Are they nervous about sitting empty-handed while others open more gifts? You may be able to assuage their concerns while sticking to your overall plan.

5. Invite the Whole Family to Participate

Opening gifts together can get awkward if your brother’s kids are getting a Nintendo Switch and yours are getting a fidget spinner and a print-out confirming that someone made a contribution in their financial account. Ultimately, every family needs to do what’s right for them, but you can plan ahead to set equal standards where possible. That might look like planning for all the grandkids to get a small gift and a financial contribution. Or you might suggest opening stockings together but doing larger gifts separately if one family’s prioritizing financial gifts and another is doing more toy presents.

Giving a savings, cash, 529 or UGMA/UTMA contribution lets you save on shipping and wrapping costs of ordering a physical gift and keep gifting fair between everyone. Adults can choose whether they want kids to handle cash or prefer a direct contribution to a particular account. 

It may seem a little silly at first to swap cash between families (why not just toss an extra $30 in your child’s account yourself?). But it’s not all that different from texting, “What is Kevin into these days?” and ordering a gift based on a link your sibling sends you. You might even spark a great conversation about the ways you teach kids your family’s values around money.

Planning financial gifts this holiday season can help reduce clutter, lower stress, and let you and your family give meaningful gifts toward your kids’ future. Your holiday gift traditions should reflect your family’s values, whether that’s simplicity or the importance of a college education. Your family may appreciate knowing the reward of their contribution won’t lose its novelty by January, but continue to grow in years to come.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

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