How to Make It (Actually) Fun to Gift Savings or Investments for Kids

Another year, and I read another holiday gift guide that I hope will inspire me, but mostly leaves me unimpressed. Categories include “Actually Good Gifts My Kids Already Received Last Year,” “Too Messy,” “Will Break by New Year’s,” “Not Their Taste” and “Filler Gifts for Kids You Don’t Know Well.” I’m not trying to be a holiday killjoy, but many gifts bring more clutter than joy.

A financial gift toward a child’s future is a great option no matter how old the child is, whether they love Bluey or can’t stand her (just kidding—who doesn’t love the Heelers?). With years for your money to grow, your gift may be worth even more when the child in your life grows up and needs it. Contributing money toward a child’s future, such as giving to their UGMA/UTMA account, is a practical gift that can be a fun way to deepen your bond.

Avoid Awkwardness or Disappointment by Planning Ahead

The winter holidays often focus on physical gifts to unwrap and enjoy right away. If you’re interested in trying out a more future-oriented giving tradition, you might want to plan ahead with family and set expectations. First, on a practical level, talk about what kind of financial accounts are the best fit for the child’s future. One advantage of a UGMA/UTMA account is the child can use funds for any purpose, not just education, without penalty. If you’re planning a gift for a grandchild, niece or nephew, you might want to talk to the child’s parents about the gift amounts you’ve planned and how the account will be managed. On the emotional side, scaling down on physical presents in favor of financial gifts can mean the holidays will look a little different than they may have in the past. Talk with family members about how you’d like to balance your future-focused gifts with present-day celebrations. This can help you set expectations and stay organized.

Connect Giving With Kids’ Interests

The whole point of giving gifts is to feel closer to your loved ones. Instead of perusing a roundup of “gifts for X-year-old boys,” you can make a financial gift more personal by connecting with the child’s interests. Consider making a contribution as a holiday gift, with a promise to add another contribution based on the child’s achievements in the next year. For example:

• Challenge them with a per-item bonus, like $5 per book read (make your own “book club” with monthly calls to discuss favorite reads!).

• Add a contribution based on an excellent report card. This can be a good conversation starter to learn about the child’s favorite school subjects and what they hope to be when they grow up.

• Give an extra contribution to mark a major achievement, like competing in a science fair or getting a lead role in the school play (and go see their games and shows if you can!).

• Match their summer job earnings to put money aside for their future.

Give Kids Your Time

“Experience gifts” prioritize quality time and interesting activities over more possessions for the pile. You might combine your monetary gift with an inexpensive gift that lets you share meaningful time with a child you love. Some ideas include:

• Bundle a book or movie along with a package of microwave popcorn: Kids can enjoy unwrapping a physical gift, and they may be excited to share a snack and a story or movie with you.

• Give seeds and gardening gloves: Plan to tend a flower or vegetable garden together. (This can also be a hands-on way to understand the idea behind how investments grow over time, too—small actions now that can turn into a beautiful “harvest” later.)

• Bring a photo album or print photos: You can share family stories (what were their parents like as kids?) or spend time making a new scrapbook together.

• Learn their favorite game: Challenge grandkids to a video game tournament, explore their Minecraft village or learn the details of their best Pokemon cards. Especially if you don’t get to see the children in your life as often as you’d like, learning about their interests in advance can help you make the most out of a visit.

• Bring tools: If you’re a grandparent who’s great with a screwdriver, you can make every parent’s day by volunteering to take charge of assembling a child’s new play kitchen or jungle gym.

• Make a recipe together: Hand-me-down recipes can become cherished memories, for the cost of some simple ingredients. Include a handwritten notecard with the recipe and have someone take a picture of you and the child at work in the kitchen.

Watch Your Gift Grow

New gifts are exciting, but many won’t last until next year. Toys break or lose their appeal, clothes go in the donation bin and puzzles and games lose pieces. It can feel good to give a gift that lasts even when fads change and kids grow taller in the next growth spurt.

Investing for kids can offer the potential for contributions to snowball into a greater gift through market gains. As young kids’ dreams for “when I grow up” turn into real plans for college majors and career paths, your gift can be a helpful resource to boost them further toward a thriving life.

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

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