Finding the perfect holiday gift can feel like searching for a diamond in the rough. Everywhere you turn, you’re bombarded with ads for the latest flash-in-the-pan game console, reminders that only the priciest jewelry will prove your love, and urgent email blasts that the toy du jour is about to sell out. All of these are fine gifts for the here and now, but they lack staying power. They might add some fun to your loved one’s life, but there’s nothing about them that dramatically improves it.
Most people never consider these 5 financial moves — and they’re leaving thousands on the table.
Time to think outside the box. Consider a gift that could help your loved one afford their own beautiful things by helping them build greater wealth. That’s right — there are plenty of presents that can help your loved ones of all ages build better, more financially secure futures.
Get a Child in Your Life a Savings Account
You can become a truly legendary auntie or uncle by getting the kids in your life an interest-bearing savings account. Okay, so it’s not exactly the new Mario Kart. It’s even better. Opening a savings account in their name allows you to have a conversation with them about the value of saving money while introducing the concept of interest — and how they can grow their money without lifting a finger.
While they’re still little hatchlings in life, you can talk to them about the importance of building a nest egg by monitoring their accounts and making regular, small deposits. If you’re shopping around for the right bank or account, well, you don’t have to deal with the mall crush — just look at GOBankingRates’ Best Banks.
Set That Hard-Working Young Adult Up With a Roth IRA
Roth IRAs are often thought of as tools for hard-working adults at an age when back pain becomes a regular part of getting out of bed. But is there anyone more industrious than a teenager or young adult working jobs that go unappreciated but keep the world moving?
If someone earns income, ideally represented on a W-2 form, they’re eligible to contribute to a Roth IRA (or even a traditional IRA, which some might call the OG IRA). You can help them open their account and even kick it off with a donation on their behalf. The maximum IRA contribution for 2024 is $6,500 (or $7,500 for individuals aged 50 and older), but the amount you contribute cannot exceed the giftee’s earned income for the year.
That’s a whole lot cooler than yet another pair of socks — and much more useful in the long term.
Help a Friend or Family Member Out With Debt
There’s no greater gift than that of hope. And people who are mired in debt, whether it’s student loans, credit cards or auto loans — hope can feel like it’s in short supply. If your best friend or cousin is struggling to make ends meet, consider offering to cover a payment or two to help them get back on track.
If you know that your loved one is going to have a major expense coming up, like closing on a home, purchasing a new car, or preparing for a baby, you could also gift them a lump sum to help soften the financial blow. This generosity could alleviate — or at least reduce — the amount of debt they have to take on.
To make the holidays truly merry and bright for your nearest and dearest at all stages of life, skip the socks and fruitcake (seriously, skip the fruitcake) and get out your checkbook. When it comes to holiday gifts that will put the holly jolly into your family’s lives, give them the tools to grow their wealth.
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This article originally appeared on GOBankingRates.com: 3 Best Holiday Gifts To Help a Loved One Build Wealth
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