Christine Benz of
Morningstar recently published an interesting article called "
The Best Ways to Give a Financial Gift to Children." The article has good information for different ways to give a financial gift, but I might not classify them as the "best" ways. The article really focuses on more sophisticated ways to give larger amounts of money without letting the child spend it - at least not right away.
The article proposes 4 ways of gifting to children:
- Set up a UGMA/UTMA account (Uniform Gifts/Transfers to Minors Act)
- Contribute to a 529 Plan (college savings account)
- Fund a Roth IRA (Individual Retirement Arrangement)
- Give a financial knowledge gift (a basic finance book)
The article explains these 4 strategies pretty well so I'll let you read it yourself. But, I'd like to add three simpler options below:
