We’re just at the beginning of the holiday shopping season, the point where parents and grandparents start planning what to give to the children in their lives. According to a recent TD survey, many parents and grandparents opt to give children a financial gift in the form of cash or an RESP contribution. Many see this as a great way to help teach children about money management from an early age. How early?
Linda Mackay, senior vice president, retail savings and investing, TD Canada Trust, says that very young children can learn the basics of managing money and Parenting Expert Nanny Robina agrees. “Children love to play pretend, so why not use that as an opportunity to teach them about money?” Nanny said. “For example, giving them fake money and a grocery list of items to “pay” for helps them understand the value of a dollar. This method can also extend into spending and saving with an allowance, which can then be applied to budgeting in high school and university.”
Canadian parents tend to agree. 38% of parents and grandparents surveyed said under 10 years of age is the appropriate age to start talking about finances with their (grand)children, while 34% say it is 10-14 years of age and 17% say 15-17 years of age is the appropriate age.
When giving a financial gift for the holidays, cash for establishing or adding to a bank account and contributions to an RESP are the most popular options for Canadians (followed by a savings bond, mutual fund, TFSA and GIC). While children under the age of 6 can learn about money management with a simple piggy bank concept, older children between 6 and 10 can learn about saving for larger items including how long it will take. Children older than 10 will start to consider post-secondary options, so ages 11 to 15 are a great time to start talking about the purpose of an RESP, explains Linda Mackay.
Do you incorporate financial gifts throughout the holidays or other special occasions? My kids love receiving cash or gift-cards (also known as credit cards to my kids, which is also a great way to introduce a discussion on credit lines, actually!) My children’s personalities shine through, as my oldest son is a saver while my middle daughter tends to spend her money as quickly as she receives it.
Gifts in the form of cash or gift cards are the perfect leaping point for those discussions – we will flip through catalogs or flyers and talk about how much money is needed to buy their coveted items, and then how much they’ll have left afterwards. We have family members who help out too – my oldest daughter’s Godfather always gives her a cheque to go towards her RESP for birthdays and Christmas, and I love that – by the time she is ready for university, he will have had a significant impact on her RESP.
MacKay says it’s easy to understand why many parents and grandparents are giving children a financial gift as a holiday present.
“The real gift here is financial education, which is the foundation needed to develop healthy financial habits in the future,” said MacKay.
(More results from the TD survey can be found on the press release here!)
I like the RESP idea. Start to a good future.
I love it for annual gifts for birthdays too – kids know that from auntie, grandma, Godparent or whatever, they will get $ for their RESP. Not so exciting at 5 but they’ll love that at 15.
We are just starting with gift cards for our kids. They are getting to the age of being hard to buy for and somewhat picky. This way they can learn to budget. Great idea.
Tip with gift cards: If they don’t use up the full amount, use a sharpie marker and write how much is left on the front of the card.
We give the girls some money
When we give money it goes straight to the savings account.
My daughter is starting to get gift cards and money now.. shes learning about how much she has and what she can buy etc..
We have an RESP for my daughter since she was 3months old. We contribute monthly but any birthday or christmas money she gets we put in the account. Toys & clothes only last a short time, this resp will help build her future.
It’s very true! I think a balance (excuse the pun!) between the two is great – a gift as well as a monetary gift for the savings account or RESP. And I know which one will last well past 18!
Financial gift is a great gift as long as it goes in to a savings account or what not to save for their future or college!!
Our grandchildren have a bank account and that is where their gifts go. Not all their gifts but one of them at least. They are quite excited about this too.
We have been giving our eldest grandson cash this year as he wants his own computer, he has been doing lots of jobs and he is almost there – pretty good for an 8 year old
That’s awesome for an 8 year old!
I have put 100 dollars a year in an account for my son since he was born he now has almost 3100 dollars and he just re-invested it 🙂
That’s awesome Jo-Anne!
I save using CSB and RRSP’s 🙂
We don’t usually incorporate money gifts however we have a couple of times when our grandchildren wanted to participate in specific activities. We gave money that was put towards their wish.
Love this idea. It’s a great way to help them with their future 🙂
My kids always get cash from their relatives, and it always goes into their Scholarship accounts! I wish mt parents would have done that for me when I was born!
we do this occasionally and my sister has asked us to do this if/when buying gifts for her kids.
i keep meaning to give money for RESP- I shall start this year
I wish my parents taught me about money when I was a child. This is great for my grandkids
I put money in the cards and send to the grandchildren. What I put in the last one they used at the school book fair.
My mother-in-law puts money in our daughter’s bank account every month, saving for her education. We will be converting it to a RESP soon.
Love the RESP idea as many kids already have to much junk around the house!
LOVE the idea… My kids have WAAAY too much junk
We do this for my girls birthdays; especially for the one born close to Christmas.
We’ve always gone the RESP route for our grandkids.
We give gift cards to the grandchildren and money goes into our childrens accounts
A great idea to teach children the value of saving for the future.
This is a good idea.
We are incorporating more money gifts then before, the house is overrun by toys and I figure it gives them a great lesson in saving
Monetary gifts are a great idea especially for grandparents who don’t live near their grandchildren & have no idea what to get them otherwise. Now it is up to the parents to start that discussion about money .
We always ask for RESP money for the kids’ birthdays rather than gifts. They aren’t too happy about it now, but will thank us in the future!
my dad started bank accounts for all of his grandchildren a few years ago. Every Christmas and birthday and good report card he put a little something in there. All too often kids get too many toys and stuff that just sits around and doesn’t get touched, later in life when they have access to these accounts they will appreciate it
Starting saving for RESPs as soon as possible are SO important.
My daughter loves receiving $ she has been saving up for a puppy, but we have yet to start a RESP. My great-grandfather started one for me as a child.
my kids are good with their money , each has bank account and put a portion in from birthday money or when everthey have some saved up in the piggy bank!
I find it easier to give cash for Christmas. My daughter is older, and fussy and cash is always appreciated.
Financial gift is a great gift as long as it goes in to a savings account !!
I do not yet have any children, but my sister asks for gifts of cash which she puts away and saves for her kids education! I think its a great idea that I will follow when I am a mom
This is my favourite kind of gift for my boys. Every little bit helps!
I would love it if our relatives/friends would do this for our kids.
It feels strange asking for money, but it makes sense, better than toys that they may get bored with or gifts they don’t like. Teaches responsibility as well.
It feels strange asking for money, but it makes sense, better than toys that they may get bored with or gifts they don’t like. Teaches responsibility as well.
Great idea! My uncle used to buy us bonds every year for xmas, at the time we never really understood why. Might have to start doing this for my girls 🙂
My son is almost 1 and I love that we have been gifted with RESP $ for him from family. It helps us so much for saving for his future.
It really does work! My grandchildren now understand that when they get money for gifts, they have to save half of it. It’s a learning tool they will use all their lives.
This is a great idea. My kids Nana gives then money/drafts for christmas each yr. I think they are very lucky-besides they have enough toys and ‘stuff’
I like the idea of a financial gift although I’ve never seen one given for the holidays in my family before.
I have an resp, it just sucks that I cant give out the account number to my grandparents, then theyd be able to deposit money from christmases and birthdays etc into it for him.
its a great idea to give resp’s
We will for sure be doing this for our newest grandson due in March!
Much better than toys that are soon forgotten
RESPs are great gift ideas, especially from family members.