WASHINGTON — I love giving gifts to my family and friends during the holidays. Throwing a gift card in an envelope has never been my style — I prefer choosing something personal and useful.
Over the years, I’ve given so many scarves, cheese knives and wineglasses that this year I decided to give gifts that have a positive and lasting impact. And since I advise people on their finances and investments, I am giving the gift of financial empowerment.
To be financially empowering, my gifts had to meet at least one of several criteria. They must be:
- Educational, but not boring
- Tailored to meet the needs of the person receiving the gift
- Worth more in the future
With this in mind, here’s what’s on my gift list this year:
Women in transition:
Facing the holidays for the first time after a divorce or death of a spouse can be extremely difficult. It can be a lonely and unsettled time as your friend navigates life as a single person again. The best gift you can give them is acknowledging their situation rather than ignoring it.
Having worked with women in transition over the years, many of them are at a loss for how to deal with their finances. Making financial decisions for themselves — and in many cases — by themselves is stressful. Show your friend that you care about them and understand their situation by giving a gift that uplifts and empowers them.
If someone you care about is divorced, Own Your Own Financial Freedom by Andrea Kennedy, is a must-read and a great place for your loved one to start educating herself about finances before, during and after a divorce. While Andrea helps women navigate the financial ramifications of divorce, this book is also a great primer for all women providing practical lessons about investing, calculating net worth and other financial planning essentials.
Kids of all ages:
I love the idea of teaching the basics of investing by having a personal stake in the game. And who wouldn’t want to own a piece of his favorite company? If your child likes Build-A-Bear or Disney, or you know someone who loves Harley Davidson or Under Armor, you can buy that person one share of stock from Give A Share. Many companies offer stock certificates (or replicas) that are beautiful pieces of art, and you can opt to have the certificate framed and ready to hang.
The fun part is teaching your child (or learning along with them) about investing by following his stock and discovering the perks that come with stock ownership, like declared dividends. The best lessons are learned through sharing a personal experience. As the stock goes up or down in value, your child will learn the benefits of investing wisely and for the long-term.
If your millennial just isn’t getting the whole “personal financial responsibility” part of adulting, then put You’re So Money: Live Rich Even When You’re Not, by Farnoosh Torabi on your list of gifts. Farnoosh combines wit and humor with practical, useful advice to help millennials make the most of their money now and finish rich. If your millennial is getting engaged over the holidays, this is a great gift to start the happy couple off on the right financial footing.
Teenagers with jobs:
Ask anyone if they would like to be a millionaire, and the answer you get is a resounding “Yes!”
You could give your teen a lottery ticket, but the odds are not very good that they will be the lucky one-in-one-hundred million.
Becoming a millionaire is not really hard. The secret is simply compounding, the thing that happens to money when you start to save early and often — turning small savings into potential millions of dollars over 40, 50 or 60 years. And one of the best savings tools is a Roth IRA.
The most important requirement is that your child must have earned income to contribute to a Roth IRA, and can contribute up to a maximum of $5,500 of their earnings annually. Since they will be contributing after-tax dollars, the earnings grow tax-free.
While this is not technically a gift, since they will have to save their own earned money, you can use a Roth IRA to teach them foundational lessons of savings and wealth building.
It’s the holidays, so please feel free to give your niece the fuzzy bunny slippers or your grandson the wireless headphones, but remember that the really cool gifts are the ones with lasting value.
For more financially empowering gift ideas, please visit Her Wealth — Resources.
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