Trying to be more intentional with gifting?
US News published a great article on how to be both generous and practical when it comes to giving gifts to children. Think beyond giving yet another breakable toy! I personally believe this is a great opportunity to teach financial literacy. Until our education system incorporates financial planning into school curriculum, our children are learning from family, friends, and the media.
POWWOW suggests utilizing a Uniform Transfers to Minors Act (UTMA) account. This is a custodial account, meaning that it’s controlled by the parent until the age of majority, at which point it is turned over to the child. While the account has no tax advantages, funds can be used for anything related to the child and is a great tool to build financial savvy. For instance, children receiving gifts of $20 to $100 for birthdays and holidays can learn about making deposits, withdrawals, and the value of a dollar when an item is purchased.