The latest video game console or interactive stuffed critter might be the hottest holiday gifts for your kids or grandkids this year. But when it comes to lifelong memories, such material gifts often get forgotten.

This year, why not give them a gift that will teach them about something that’s extremely important and will impact their future: money.

But how do you find a money-themed gift that kids can enjoy and truly benefit from at the same time? From books to board games to savings plans, you actually have plenty of options.

The key to giving financial gifts is to make them fun, says Gordon Pape, co-author (with his daughter, Deborah Kerbel) of Money Savvy Kids: The Best Ways to Teach Your Children About Money For a Strong Financial Future. With that in mind, here are some tips for financial literacy gift-giving during the holiday season:

Money gift ideas for kids aged 5 and under: Give books

According to Pape, there are plenty of great reads for kids five and under who are just starting to formulate a concept of money. Among them are The Berenstain Bears’ Dollars and Sense, by Stan and Jan Berenstain, in which Mama gives her cubs an allowance and guides them through the consequences of impulse spending.

Another book for teaching kids about money is Benny’s Pennies, by Pat Brisson. In story and in rhyme, the book is about Benny, a small boy, who uses five different pennies to buy gifts that are meaningful to him. A rose for his mother, a cookie for his brother, a paper hat for his sister, and so on.

For die-hard Dr. Seuss fans, there’s One Cent, Two Cents, Old Cent, New Cent: All about Money, by Bonnie Worth. It’s the one where the Cat in the Hat explains the history of money and how coins are minted.

Money gift ideas for kids aged 7 to 12: Give games

Board games such as Monopoly provide great doorways into the discussion of money, says Pape.

“They provide teachable moments, where kids learn about taking risks in finance, even if it’s with play money,” he says. “They also learn that sitting on the most cash doesn’t mean you’ll win the game.”

Plus, many classic board games like Monopoly are now affiliated with popular franchises that kids adore. For instance, there’s Monopoly: Star Wars The Child Edition or Monopoly Avengers.  

For older kids in this group, between the ages of nine and 11, you might consider a more complicated board game such as Settlers of Catan. This game involves building colonies, cities and roads by trading resources and materials such as brick, lumber, wool and grain.

“This game doesn’t really involve money, says Pape. “But it does involve resources and teaches kids how to be strategic with the materials they’re building with.”

Money gift idea for tweens or teens: Give an allowance on plastic

An allowance on a reloadable, prepaid card makes a great gift and teaches kids financial responsibility, says Manisha Thakor of MoneyZen Wealth Management.

“You can give them a prepaid card with an extremely limited amount on it,” she says.

Unlike traditional credit cards, prepaid cards offer access to cash that already belongs to the cardholder, rather than allowing the cardholder to borrow money for purchases. But they can be used like credit cards in the sense that you don’t have to carry around wads of cash in your pocket.

The prepaid card will teach them the connection between plastic and physical cash at an early age.

It can also help teach them about budgeting. For example, if a teen tries to splurge, he or she may find they hit their credit limit too soon.

Many preloaded cards charge monthly, activation or transaction fees, and some have usage restrictions. So be sure to shop around for the best features.

Money gift idea for kids of any age: An RESP

Instead of giving holiday gifts that they’ll quickly outgrow, why not invest in their future by opening a registered education savings plan (RESP) in their name.

What’s that? An RESP is a tax-sheltered savings plan designed to help you save for your child’s post-secondary schooling. The tax advantage comes in when your child’s ready to take money out of an RESP. When this happens, the investment income, grants and bonds generated within the RESP is taxable in the hands of your child, rather than yours.

What’s more, the government will match 20% of your annual contributions up to $500 per year to a lifetime maximum of $7,200, for each child. That’s more than seven grand in free money – plus whatever investment growth that money generates while it’s in the plan.

Plus, there’s also the Canada Learning Bond (CLB), which is designed to help students from low-income families. The CLB could boost the amount in the plan by another $2,000.

You can also ask grandparents, family and friends to contribute to your child’s RESP instead of buying gifts.

Worried your kids won’t like this idea? Babies and toddlers are really too young to care about gifts. But if your child or teen wants actual presents, ask your family and friends to put only a portion of their gift budget towards the RESP. They can then use the other portion to buy something your kids can actually unwrap.

Your kids may not appreciate the value of an RESP now. But they’ll thank you for it later, especially if it helps them evade student loans and high tuition fees.

  • How much will it cost you to put your kids through college or university? Try out our free RESP calculator. You’ll get a sense of how much you’ll need to save to help cover your children’s education costs.

This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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