Beyond Toys, Financial Gifts for Kids - Expert Edition Episode 52

My daughter is turning 10 soon, and it got me thinking about birthday gifts. Not just any gifts, but special ones that can help her in the future. Instead of toys or clothes that she'll soon outgrow, I love the idea of giving her something that grows with her, like investments or savings for college. I've found some cool ways to do this, like setting up accounts where friends and family can help contribute to her future. And I've got some great tips for how you can do the same for the special kids in your life. So, let's dive into how we can make gift-giving more meaningful and helpful for our kids' futures.

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TRANSCRIPT:

[00:00:00] Naseema: What's up, what's up, what's up my financially intentional people. So my daughter's 10th birthday is around the corner and I wanted to know how you guys handle gifting. How do you handle gifting when you're going to a kid's birthday party or your own kids? Like How did you think about buying them gifts?

So I want to talk to you about how I have traditionally done it and i'm looking forward to hearing you guys's thoughts in the comments or through my dms about this, but again, my oldest 10. I guess it's a milestone birthday double digits. And typically when people ask me what they should give her, I usually say that they can either Give me the cash or they can donate to her 529 or Recently since we've been using the app stockpile they have a feature where kids can make a wish list of stocks and you can buy the stocks now let me just full disclosure tell you that stockpile no longer Allows this feature but because my kids have this link that was Built before they terminated that feature somehow some way people can still use that link to gift them Stock, but anyway, my kids have Too much stuff if I showed you a picture of their room They have way too much stuff more stuff than they're willing to clean up which is telling me that They have more stuff than more toys more clothes than they can handle like their drawers are over full Their closet they have two closets.

They've even taken over the closet in here with just their matching outfits. So When I am thinking about gifts for my kids, I want something that's gonna last long term So no, i'm not gonna knock you if you buy my kids toys or whatever. That's fine But if somebody is really asking me What my kids want for their birthdays or for Christmas, I usually say invest in one of their accounts.

This has been done like a multitude of ways. And before I used to be straight into their 529 accounts. So I've used a couple of 529 accounts. Vanguard has a way where you can contribute into their 529 account. They generate a link through their 529. I just did some research before this podcast.

Fidelity also has a way you can create actually a gifting page for your kids where It's called your 529 gifting dashboard. Your college gifting page is where friends and family can give a gift online to help you achieve your college saving goals.

Customize your page below and agree to the terms and conditions, whatever, whatever. So it's a way you can donate. And on here, you can have a greeting. To the people that are giving like hey, this is naima's college gifting page And she can upload a picture and people can go on there and give and for 5.

29 and gifts like that The amount that you are able to give is typically What you can give as much as you want, but as far as gifts go you want to check? With the year to see what is, what the gifting max is. And before you get in trouble with gift tax. For 2024, the annual gift tax limit is 18, 000 dollars. That's up from, 1, 000 last year. So what that means, is that you can legally give someone up to 18, 000 without a tax hit. Okay. Or without tax implications and that's Per person. So Say for example my dad and my step mom wanted to give naina both 18, 000 each they can do that. Because they're a married couple So it's individual so they can give thirty six thousand dollars total to her as a gift. So let me back up and then I want to walk you through the accounts my kids have again and then How people can contribute to them.

So my kids have Roth IRAs. They have their 529 college saving plans and then they have their custodial brokerage accounts. So Traditionally, you can gift into their 529s and through Stockpile, you're able to buy them stocks, which is something that was grandfathered in, which I hate sharing because you actually can't do it anymore. I reached out to Stockpile's customer service and asked them if you again can create wishlists and they don't have.

The capacity to just set that up for new accounts now, but my kids were grandfathered in. So I can send out a link that has a list of stocks in there that people can buy for them on their birthdays or holidays. And then, like I said,

vanguard has a link that you can give to people that they can contribute to your kids 529. And like I said, Fidelity has a gifting page where you can set up this page with a link to it that people can contribute to your kids 529. And then also just recently I opened an account with GoHenry, which is owned by Acorns and it is a money management system that teaches your kids how to handle money.

And I'm using this with Naima. So what, GoHenry is, is basically a debit card. It gives your kid access to a debit card, and you're able to manage the cash that goes into it. And also a teaches them financial literacy by having them play these interactive games, which you can set like anywhere from 50 cents to, I think like 3.

Like every time they complete one of these lessons, they get rewarded. It makes it so that they're automatically given an allowance of whatever set amount, like. 5 every week. So Naomi gets 5 every Saturday. But they also have a component where someone can gift money through GoHenry. So those are the ways that people are able to contribute to my kids accounts.

And this is the script that I share with them because I know some people are like, it's tacky to ask for money, but why is it tacky to ask for money when it's not tacky to get gifts in general? Because my kids don't need really like that doll that you're going to give them are those clothes that they're going to grow out of I'm telling you, they have plenty. So anyway, so this is my script for asking for investment contributions in lieu of gifts for the holidays. So loved ones. We appreciate the role you play in our child's life, and your presence is present enough if you wish to contribute a gift. We ask that it not be a toy or clothes as we are blessed in that department.

Instead, we ask that you consider a gift that will continue to grow as they grow. We want to encourage the kids to think like owners and not consumers and teach them how to invest. and companies they believe in. Here's the link. That's the script that I send out around the holidays to friends and family or around birthdays to friends and family.

I put that on the invitation, but yeah, I think those are ways that might have helped bolster my kids. 529s their custodial brokerage accounts. And now especially when it comes to Naima her own bank account and I just let her use that money for her spending money. So I think We need to take a close look at how we give gifts what these gifts mean are we just throwing away money I also want to talk about my approach to gift giving.

I hate buying gifts that I know the kids aren't going to play with their clothes are going to outgrow. So if I don't give cash, two things I've done I have given Stockpile which is an app again, the app that I use to let my kids pick individual stocks. Stockpile has a way that someone can give a stock gift card.

So you can go in there. Buy a stock gift card and give it to the kid and it can be emailed or text. And so what I usually do during a birthday party is, or beforehand, like if it's for one of my kids friends, I'll say, Naima, we're like, what kind of company do you think your kids are really in? Your friend is really into, let's say something like, okay, Nintendo.

Okay. So we'll go on stockpile. buy a nintendo stock gift card and mail that to The parent or email it to the parent and I usually don't do it until the party so I can explain To the parent what it is because most people aren't familiar with it. The other thing I have done and i've also posted about this is for like older kids.

What I do is I just give them cash. So I'll go to the bank, get about 40 and I have this printout on how to open a brokerage account. So step by step how to open a brokerage account. And if they put the 40 in this account, plus, maybe 40 every month or whatever, I show them like how much money this.

How much this money can grow in the long term how much they can have As young adults or older adults or even into retirement So those are the things I like to do when I get gifts for other people And it has been really well received. So i'm interested to know how you handle Gift giving in your family.

Do you dictate any terms around the gifts that your kids get? Are you interested in getting gifts of stock or 529 contributions? I really want to know what you guys are doing. And I really want to know how you give gifts. Like typically I have a 20 limit. Like nothing is going to be under over 20 when I give friends gifts or go to these kids birthday parties.

But I try to give that in cash or in a stock gift certificate. But anyway, I'm interested and I'm curious to know what your parameters are around those things and looking forward to talking to you next week in my next Tuesday episode.

Hey there I’m Naseema

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