As we countdown to the holiday and plan our gifts for the season, I am asking that everyone, parents and grandparents, other family and more, take a look at a gift of financial security for the kids.Our children have more toys than they ever play with. We have weeded and tossed, especially with the toy recalls. They still have easily 200 plus items crowding the room. I hate to do the math as to what the dollars "invested" in toys would have added up to put instead into their college fund. Countless thousands. I am not advocating a toyless Christmas, just a more moderate one.
AARP did a survey of grandparents about gift giving. Some of the key findings were that gift giving is mostly tied to key events, like Christmas and birthdays, not a surprise. 83% say they give because it makes them happy. But some answers were revealing about what they might really wish would happen regarding the gifts.
- A small financial gift can grow to huge amounts with the power of compounding. Yet only 22% of respondents have opened a savings or investment account for grandchildren. Those that did were most likely to put money in the lower return accounts, like bank savings accounts.
- On average, grandparents spent a median total of $600 in gifts or cash on all their grandchildren last year.
- Less than one in five (19%) have given money and/or gifts worth $1,000 to a grandchild for a single occasion or at one time.
Just imagine if only a portion of that was invested in a 529 College Savings plan. How much further along would your kids be in college preparation?
Just think about buying one less toy and giving that amount to the college savings plan your family has in place or create one - everyone will thank you later when they are debt free upon graduation.
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