Investing in Their Future: Top Financial Gifts for Grandkids
By Jeff Gilbert
Have you been thinking about creative gifts for your kids or grandkids? Instead of choosing items that may break or lose their appeal quickly, many families are opting for gifts with lasting value. These thoughtful presents can help children, grandchildren, or friends learn about money management and give them a head start on building their financial future. They offer a lasting impact, helping to instill valuable financial habits from a young age.
To help, I’ve compiled a list of what I believe are the best financial gifts to give to the younger generation.
1. Set Up a Roth IRA
The first gift that comes to mind is a Roth IRA. Children of any age who have worked and received a W-2 can fund a Roth IRA and build tax-free savings for their future.
By opening a Roth IRA for them, you can help them build a strong financial foundation early in life. Contributions grow tax-deferred, meaning that there could potentially be substantial long-term financial gains.
To open a custodial Roth IRA for minors, you must specify a custodian who can oversee the account until the beneficiary reaches the age of maturity. Select a custodian who shares your investment philosophy because that person provides guidance and support to the beneficiary.
Opening a Roth IRA at a young age can help them form a strong savings habit and be positioned for a solid financial future.
2. Buy Stock in a Kid-Friendly Company
Another smart financial gift for kids is buying stock in a kid-friendly company.
A fun and instructive way to introduce kids to investing is to buy stock in a publicly traded company that caters to their interests, such as Disney or Mattel. Owning a portion of a well-known business allows children to gain knowledge about the stock market, corporate profits, and dividends.
Interest in their investment usually rises and falls in tandem with the company’s stock performance. It’s crucial to keep in mind that stock investing entails risk and the investment’s value can fluctuate.
Giving them equity in a business that interests them sparks their interest in finance and business. Children can also learn the value of patience and long-term planning by watching how their investment performs.
3. Contribute to a 529 Savings Plan
A 529 savings plan is a tax-advantaged plan designed to promote saving for future education expenses. By making contributions to a 529 plan, you can help your child or grandchild save for graduate school, college, or other eligible educational costs. The profit in the account grows tax-deferred, and debits for qualified expenses are most often tax-free.
Opening a 529 account is a fairly straightforward process. Many states provide their own 529 programs with a variety of investment options. You have the choice of setting up automatic monthly contributions or making a one-time payment. Gifting a 529 plan provides the opportunity to lessen the financial burden of higher education and help your loved ones reach their educational goals.
4. Open and Contribute to a Custodial Investment Account
Introducing a child to the concept of long-term compound growth and the virtue of investing patience is a valuable and enduring gift. If a Roth IRA or 529 account doesn’t suit your needs due to their specific rules, consider setting up a taxable custodial account in their name and making regular contributions. Investing in broad market indices like the S&P 500 or Nasdaq 100 can provide a practical learning tool, offering insights into market fluctuations and the power of compound growth over time. Additionally, contributions to the account aren’t limited to just you; others can contribute as well, with no annual contribution caps.
It’s important to stay mindful of the tax implications for custodial accounts. For 2025, the first $1,350 in earnings is generally tax-exempt at the federal level, while the next $1,350 may be taxed at the child’s rate. Any earnings beyond $2,700 are taxed at the parent’s rate. Also, keep in mind that assets in custodial accounts are considered the child’s assets in financial aid calculations.
Professional Help to Consider Financial Gifts for Grandkids
Giving a child a financial head start is one of the most impactful gifts you can offer. Whether it’s opening an investment account, contributing to a college fund, or teaching them the value of compound growth, these gestures lay the foundation for lifelong financial confidence.
At Balboa Wealth Partners, we’re passionate about helping families make intentional choices that support generational wealth and lasting financial well-being. That includes smart financial gifts for grandkids. If you’re thinking about giving a gift that grows over time, we’d love to help. Connect with us today at 949-445-1465 or email me at jgilbert@balboawealth.com.
Scottsdale office: 480-801-5010, info@balboawealth.com
About Jeff
Jeff Gilber is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Jeff and Balboa work with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
