Financial gift giving this holiday season


It is that time of year again when the kids are anxiously awaiting the arrival of Santa Claus and all he brings on Christmas morning. As my husband and I look around our home and begin to put up the decorations, it becomes quite apparent to both of us that the kids really don't need anything.

Now, that is not to say that we will be practicing our best Ebenezer Scrooge impression, but thinking about things with a lot more clarity in regards to what they ask for and what we actually get them.

While making the kids' beds this morning, I realized that my two youngest do not need another Barbie doll or another stuffed animal for that matter. I will keep that in mind when beginning the Christmas trek to the malls or while shopping online from the comforts of my own living room. There will still be presents under the tree from their wish list, but there may also be a few things designed around planning for the future.

They may not see the initial benefit to it, but what about a monetary gift deposited into their very own bank account? How appreciative will they be when they see the results of your investment in them?

My parents were notorious for getting them whatever they asked for, sometimes to the point of excess. My in-laws are pushovers when it comes to the girls. I know they mean well and have only their best intentions at heart.

Rather than loading up the tree with all the latest toys and electronics, I am going to urge them to consider a financial gift with the kids' future in mind. An RESP would go a long way in securing their education. Opening a first bank account with a debit card attached serves two purposes; first, it would teach responsibility and second, it would teach them a sense of will power.

According to the TD Bank, statistics show that 50% of Canadian (grand) parents say they have either purchased a financial/investment product for their children (31%) or say they have not yet, but plan to (19%). 16% of Canadian (grand) parents who have made that commitment or plan to, say it was given as a gift around the holidays. 38% have/will utilize the RESP first, followed by a cash deposit (27%), then savings bond (16%), mutual fund (14%), a tax-free savings account at (14%) and a GIC at (9%).

We keep hearing in the media about our children's generation being the first generation to possibly have a lower standard of living than their parents. With housing costs, education costs and the overall cost of living being what they are, giving a financial gift just makes good sense.

TD Bank says that 63% of Canadian (grand) parents who have made the investment in their grandkids do it because they are concerned for their futures. Some say they can use it for things that will enlighten them, like travel (23%), home buying (20%) or towards giving them a sense of financial literacy (15%). Research also shows that no matter what demographic the grandkids are in age wise, it is a very smart idea to make a financial gift part of their future. Teaching them about money and how to save can only help with their own future investments.

According to the latest survey, 89 percent of parents and grandparents think its very important to start talking to children about finances before they reach their late teens and almost 40% think the conversation should begin before their children have reached the age of 10 years old. Most however, find it difficult to start the conversation about money as it can come across as boring and trivial. The TD Bank has tips about giving a financial gift for the holidays and how to make that conversation fun and very age appropriate.

No matter what you have planned for the holidays, be it at home or away on vacation, make sure it is done safely. Here's hoping that 2015 brings with it health and happiness to all.