Giving experiences or financial gifts can create fond memories and lead to less stress.
The holiday season is once again upon us. According to Forbes, in 2022, Black Friday sales totaled an estimated $9.12 billion in online sales alone. (1) The National Retail Federation reported “a record 196.7 million Americans shopped in stores and online during the five-day holiday shopping period from Thanksgiving Day through Cyber Monday.” (2)
While these numbers might be great for retailers and the economy at large, they can add up to trouble for the average consumer. The Federal Reserve Bank of New York reports the total household debt skyrocketed by $16 billion in the second quarter of 2023. (3) Along with the financial hazards of holiday spending, studies show that clutter in our homes doesn’t just make cleaning more difficult, it makes us less happy. A study in Current Psychology found that clutter led to an increase in procrastination, life dissatisfaction, and levels of cortisol, a stress hormone. (4)
What does this mean for generosity in 2023? As you are preparing for the holiday festivities, we suggest looking into different gifting options. These options can help you acquire less things, give more meaningfully, and have a lasting impact on those you love.
Participating in art-related activities can have a positive impact on participants’ social and emotional health and development. We also know that spending quality time with family helps to support children academically as well as emotionally. In light of these truths, here are some ideas for experiences you can purchase for your loved ones this holiday season.
- Zoo season pass
- Theatre season pass
- Cooking/baking classes
- Art classes (photography, painting, sculpting, etc.)
- Family vacation
As financial planners, we also encourage our clients to investigate ways to gift wealth throughout their lifetime. Not only does this help the recipient, it also allows the giver to see the benefit their wealth will provide for the next generation. Below are some finance related options for gift giving this holidays season.
- Savings Bonds: These are low-risk investments backed by the government. They usually have long maturity times which helps young investors learn the power of patience when it comes to growing wealth.
- 529 Contributions: These are funds specifically designed to help students save for educational expenses. There are many benefits to opening these kinds of accounts. We recently wrote a series of blogs explaining my529s. You can find them all in one place here.
- Stocks: See our article on Schwab Slices for a great way to gift stocks to younger investors!
- High Interest Savings Accounts: While not the best option for everyone, these savings accounts can be helpful for those not planning to go to school and who could benefit from the immediate financial gain they would not get with a bond. These can be used to help gain confidence in saving and budgeting all while earning a higher-than-average interest rate.
- Greenlight Debit Card: This is a wonderful way to teach kids how to budget! Greenlight also has many financial education resources on their website to help parents teach healthy financial habits.
We hope these ideas help you as you navigate this gift giving season. If you are interested in how you can best pass your wealth onto the next generation, we’d love to talk with you about the many options available. You can schedule a free, no obligation Getting Acquainted Call today.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by GW Financial, Inc. to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 GW Financial, Inc.