For 11-year-old Max Schwartz, the holiday gift he’s most curious about is a little box of dollar bills.
Last year, as an incentive to get Max thinking about saving, spending and donating, his banker dad offered to double part of his $24 monthly allowance. In return for not touching those savings all year, his father dangled another bonus: he’d double it again at year’s end.
Twelve months later, on Christmas morning, Max opened a check-sized box. Inside was $200 in crisp dollar bills. His father, Peter Schwartz, admits he’s “way too nice” and added a bigger bonus.
Of that total, Max got to spend 70 percent, had to save 20 percent and got to choose where to donate 10 percent. When the Granite Bay, Calif., fifth-grader showed up a week later at the Society for the Prevention of Cruelty to Animals — his chosen charity — to hand over his $20 donation, the staff cheered, rang a bell and hugged him.
“In one year, he learned the power of saving … and the power of giving away,” Schwartz said of his son.
Max’s dollar box is just one example of a money-mindful holiday gift. In an uneasy economy, many families like the idea of giving something that gets their kids — of any age — thinking about smart money managing.
With that in mind, here are some money-minded holiday gift ideas from parents, grandparents and money professionals that you can describe in a note and stash under the tree this morning.
• Ellen Powell, nonprofit consultant, Elk Grove, Calif.: Several years ago, Powell had to start taking $2,000 a year from an IRA that her savings-minded dad left her in his will. “It’s money I never expected to have, and I thought: ‘What would my dad have wanted me to do with this money?’ ”
The answer: Open Roth IRA accounts for her kids, then ages 19 and 22. Every year since, she adds equal amounts to those IRAs.
Creating retirement savings for her dad’s beloved grandkids is “a way of honoring him,” Powell said. “Someday that money will be worth something to them.”
• Susan Lyon, finance analyst, NerdWallet.com: On the receiving end, Lyon said the “best money-minded gift I ever received” was a check from an aunt and uncle to open her first Roth IRA. Just as important: They walked her through the process, “making sure I understood what was happening every step of the way.”
At 19, Lyon thought the holiday gift was a little odd. But today, at 26, the Princeton graduate calls it “the gift that keeps on giving year after year.” Not only did it lessen “the intimidation factor” of investing, but it gave her a 5- to 15-year jump on her retirement savings.
• Kay Brooks, estate planning attorney, Sacramento, Calif.: For parents who’ve loaned their children money for a home or car — and where the funds are actually being repaid, “one thoughtful idea is to forgive some or all of the loan as a year-end gift,” said Brooks. “It can be very gratifying to help an adult child reduce their debt.”
Other ideas: Help a young adult pay down a student loan balance. Or help a newly divorced child with financial needs due to his/her changed circumstances.
• Marcia Brixey, author of The Money Therapist: Buy a few shares of stock in companies your kids like, whether it’s fast food like McDonald’s, toy stores like Disney or beverage companies like Coca-Cola.