Grandparents: Here’s the Ideal Gift for Your Grandkids

Photo (cc) by terren in Virginia

If you’re a grandparent struggling with what to get your grandkids this Christmas, your own children have an idea for you that doesn’t involve online shopping or hitting up the local mall: college money.

According to a survey by Upromise, the savings division of lender Sallie Mae, 3 in 4 parents don’t expect their kids’ grandparents to give them a gift during the holiday season.

But if grandma and grandpa insist on buying the kids a present, the majority of parents (68 percent) would rather have their child receive money for college than a physical gift. Of all parents surveyed, millennials were the most likely to say they prefer cash for their child’s college fund as an ideal gift (78 percent).

“Most would assume the typical holiday wish list includes the latest smartphone or gadget, but we are increasingly seeing parents — especially millennial parents — focus more on the long term and contributions to a college fund as an ideal gift,” said Rick Castellano, vice president of corporate communications for Sallie Mae.

Interestingly, though parents think money for their children’s college fund is the best gift, more than half (57 percent) don’t feel comfortable asking loved ones to help fund their child’s education.

Giving your child or grandchild money for college has the potential to make a big impact down the road, MarketWatch reports:

Consider: If you give a child just $150 each holiday season toward college and do this from infancy through age 18, the child could have more than $4,000 toward college — and that’s assuming a modest 4 percent annual return on investment. Throw in a college donation at each birthday, and you could see that total double, though, of course, you’d have to invest the money somewhere (a 529 plan is a good option), as savings accounts these days don’t have high yields.

(If you hope to send your kids to college someday and don’t know about 529 College Savings Plans, you should. Click here to learn what you need to know about this excellent investment vehicle for funding education.)

MarketWatch continues:

On the flip side, let’s say the child has to borrow that $8,000 to pay for college. Considering that, as a rough rule of thumb, for every $1 a child borrows, she pays back $2, that $8,000 she had to borrow could cost her $16,000. So, give her $150 a year from the time she is an infant and she can spend that $8,000 on school and not have to repay it — or she may end up forking over $16,000 down the road.

Sure, money for college isn’t as exciting to younger children as a new drum set or Barbie doll, but rest assured: It’s a gift they will appreciate when they head to college, and it has the potential to affect their lives for years to come.

What do you get your grandchildren for holiday and birthday gifts? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

14 Things We Buy and Then Almost Never Use
14 Things We Buy and Then Almost Never Use

Save your money. These items seem alluring, but they often end up as coat racks and dust magnets.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

4 States Where Taxes on Social Security May Fall Soon
4 States Where Taxes on Social Security May Fall Soon

These states are considering reducing — or even eliminating — income taxes on Social Security benefits.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.