I must have rewritten the title 20 times before I finally realized that there is no nice way to title this post. It is what it is- a post about how to ask grandparents for money instead of toys this Christmas.
I’m sure some of you are reading this and thinking, “how tacky to ask for money”.
Here’s the deal, we don’t ask for cash, we ask for contributions to our sons’ college educations. We have both types of 529 plans for our boys: The Florida Prepaid tuition account and the 529 savings plans. We ask family members to contribute to our 529 savings plan account to help the boys pay for college.
Why ask for money instead of toys?
If you’re anything like me, you are probably already overwhelmed by the amount of toys your kids have. If your kids are anything like mine then they probably only play with about 25% of their toys on a regular basis.
We are big fans of our 529 savings plan because, much like an IRA or 401K, the investment can go up. Our financial planner has our kids’ accounts set to be aggressive while they are young so they can make a good amount of money if the market is doing well. As they kids get older he will change the accounts to be more moderate so we won’t lose money if the market goes down.
Our oldest is only 4 and already has nearly $5,000 in his 529 account. All of this is from family members giving contributions instead of gifts during birthdays and Christmas.
Is it risky? We don’t think so. Markets will always rise and fall. It’s the nature of the game and we trust our financial planner to take care of our investments. However, if you think it is too much of a risk, you can put money directly in a savings account instead or put the money towards your state’s prepaid college program.
Ask yourself if your kids really need more than 3 new toys this Christmas. If they don’t, then why are you allowing it?
Yes, I write allowing it because you do have more control over what gifts your kids receive than you think you do.
How to Ask Grandparents for Money Instead of Toys this Christmas
You really do have more control than you think you do when it comes to the gifts your kids receive. All you have to do is inform your family members that you’ve set up a savings account for college and that you’d prefer they take the money they would spend on gifts and put that towards college instead.
Side note- it’s also okay to ask for no gifts for yourself if that’s what you want. After receiving gifts I didn’t need from my mom and inlaws I finally told them last year that I’d rather not have gifts. I’d much rather them put that money into my kids’ accounts.
Are you too afraid to have that conversation with your parents or inlaws? Consider asking your financial planner to do that talking for you!
Here is the letter that our financial planner sent to our family:
Tom and Hannah’s family continues to multiply! As we all know, college costs are increasing dramatically day by day. We have opened a college 529 savings plan for each of the boys. These are investment accounts that will grow tax free for the boys’ college expenses.
We would like to encourage all family members to contribute to the college accounts instead of buying a toy or outfit that will only be used temporarily. Donations can be made by sending a check, and writing “[insert child’s name] college savings” in the for section.It will definitely benefit them much more in the long run. Plus, it will be something they will appreciate for the rest of their lives!
Appease Grandparents by Letting them Gift One Toy
I think it’s a good idea to let the grandparents have a little say in gift giving. We still allow and even encourage grandparents to give a little something to the kids. Family members usually give our boys one toy and then hand us a check for college savings. This makes everyone happy, especially the grandparents who love seeing the kids’ faces light up when they get a gift.
Don’t be Afraid to Talk about Money
Money, religion, and politics are all things we shy away from discussing, right?
Don’t fall into that trap when it comes to discussing your financial future. Unless you know with certainty that you have a trust set up for your kids to go to college, you should be actively saving for it. Christmas and birthdays are the best ways to get those contributions from family members who care about the future of your kids.
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How do you handle gift giving from grandparents? I’d love to know!