Best Gift for Your Grandchild

I have been a grandmother now for fifteen years and have twelve grandchildren. I feel very fortunate to be able to get to know my grandchildren and enjoy their unique personalities. When it comes to giving gifts to them, I have found that they usually do not remember from one Christmas to the next what we gave to them, so I have been trying to think of a gift that will last in their memories and be meaningful. It is very tempting to buy them expensive gifts so they think you are the greatest grandma in the world. But, that only spoils them, and then they all expect it - because the word gets out really quick to brothers, sisters and even cousins. So what are we grandparents to do?

I think the best gift we can give our grandchildren is quality time. Keep in touch often and show them the attention they may not get from their busy parents.

Pay attention, listen to their funny little stories, and ask about their friends and experiences. Kids can say the funniest things, and you don't want to miss out.

I did not receive large monetary gifts from my grandparents, but I have something that, to me, is more valuable. I have their written histories and pictures. My grandmothers wrote journals and even wrote their favorite sayings, poems and songs. Through them I am familiar with their parents, brothers and sisters. I treasure these precious books and pictures, and I am trying to do the same for my grandchildren.

Another gift I think that is valuable is to teach them how to use money. By gifting them money for special occasions like birthdays and holidays, they will have the opportunity to learn how to use it.

You can encourage your grandchildren how to save it for future expenses they will have like college, a car, or their wedding. You could also advise them to spend it on something that they need, instead of wasting it on something trivial. You could also suggest they save it up so that they can purchase a more expensive gift that they really want. This teaches them about saving and managing their money.

I have one handsome little grandson who is in first grade that loves to play Monopoly. He loves to buy up as much of the real estate, houses, and hotels as possible, and he usually beats me because I am more conservative. He will probably be a rich dude one day.

It is fun to watch his little mind working trying to figure out how much he will be getting if I land on his space (and I usually do)! He is a really smart little kid!

There is one thing you should be aware of if you decide to give your grandchildren financial gifts.

There is a federal gift tax calculated using a standardized rate table. Financial gifts worth more than $10,000 fall under this tax. If you are married, you can increase the $10,000 annual federal gift tax exclusion by using the split-gift benefit rule. By combining your maximum tax-free giving amount, you could give up to $20,000 to each grandchild without having to pay a federal gift tax.

I am not too worried about this tax since my grandchildren would be very lucky to get that much out of me at one time.

My oldest grandson just turned twelve, and we decided to give him a monetary gift, which we plan to give each grandchild when they turn that age. He was kind of sad when he learned he could not use the money right away, but when he really needs it later on, it will be there for him along with other deposits we plan to make as he gets older.

Another important thing if you decide to give money for future use is to make sure everyone is on the same page. Talk to your children and your grandchildren and agree on goals, make sure every one understands the tax laws and consider any impact the money will have on financial aid eligibility.

One way to help both your grandchild and yourself would be to start a 529 plan. This is a state-sponsored savings plan which is designed specifically to help parents and grandparents finance education expenses. It can also give you a nice tax benefit. Money in these accounts grow tax deferred from federal income tax and often state tax.