By Brent Matthew
When people think of financial gifts for kids, many picture a $100 bill in a birthday card. However, some kinds of financial gifts come with benefits that last a lifetime. Here are a few options that can help your kids or grandkids develop strong money management skills and accelerate their path to financial independence.
Create (or Contribute to) a 529 Plan
A 529 plan is one of the best financial gifts you can give a child or grandchild. Many people believe these tax-advantaged savings plans can only be used for college tuition, but they can fund many different qualified educational expenses. These are some examples:
- K-12 tuition: Up to $10,000 per year per student in 2025 (increasing to $20,000 in 2026) for tuition and, as of July 2025, other qualified expenses like books, curriculum materials, tutoring, and testing fees at public, private, or religious elementary and secondary schools
- College expenses: Tuition, fees, books, required supplies and equipment, and room and board (for students enrolled at least half-time)
- Trade and vocational schools: Eligible programs in fields like HVAC, plumbing, cosmetology, culinary arts, dental hygiene, IT, electrical work, and more
- Registered apprenticeships: Tuition, fees, books, supplies, and required equipment and tools for apprenticeship programs registered with the U.S. Department of Labor
- Student loan repayment: Up to $10,000 lifetime maximum per beneficiary
Even if your child or grandchild doesn’t pursue a traditional four-year college degree, 529 funds can still support their career training and educational goals.
Contributing financial gifts to a 529 plan also comes with state income tax benefits for you. You may deduct your contributions from your taxes up to the following amounts:
- Married couples: Up to $4,000 per beneficiary
- Single filers: Up to $2,000 per beneficiary
Notably, Arizona is a state with 529 plan tax parity. This means if you contribute to a 529 plan in another state, you can still enjoy the same state tax benefits.
Create a Custodial IRA for Working Teens
The earlier your child or grandchild starts a Roth IRA, the more time their contributions have to benefit from the power of compound interest. Children under 18 generally need a parent or guardian to open a custodial Roth IRA. Once they turn 18, they receive full control of the account.
You may set up a custodial Roth IRA and make a monetary contribution to the account if the child has earned income from a job that is reported for tax purposes, such as wages from a W-2 job. However, your contribution must be the lesser of these two:
- The child’s earned income for the year
- The annual contribution limit ($7,000 for 2025)
This is one of the best financial gifts to consider because it keeps on giving. When you introduce a child to smart saving habits early on, they’ll be more likely to develop strong money management skills for life.
Give Kids a Fun Introduction to Investing
Many young people don’t learn about investing until adulthood. Some kids might see investing as “boring,” but well-planned financial gifts can give them a fun introduction that sets the stage for lifelong investing.
How do you draw kids into the world of investing? It’s simple: make financial gifts in the form of stocks in a company your kids or grandkids love. A few examples include:
- Roblox (RBLX)
- Apple (AAPL)
- Disney (DIS)
- Nike (NKE)
- Snap (SNAP)
- Mattel (MAT)
When kids (especially younger ones) see that they have a stake in a company they are interested in, investing becomes less of an abstract concept. As your kids or grandkids get older, you can gradually introduce them to the fundamentals of investing and help them build a portfolio.
Need Help Planning Financial Gifts for Kids and Grandkids?
If you’re ready to make a gift with lasting impact, Scottsdale Wealth Advisory can help you make the right choice. Many of our clients make financial gifts to their children, grandchildren, or both. We help them choose gifts that offer the greatest benefit without compromising their existing financial plans.
If you have questions, contact us online today. To schedule your complimentary financial coaching session, call (480) 247-9090, email info@SWAFirm.com, or book directly at calendly.com/BrentMatthew.
Frequently Asked Questions About Financial Gifts for Kids and Grandkids
What’s the best financial gift for a child or grandchild?
A 529 plan is one of the most impactful gifts you can give. These tax-advantaged accounts cover a wide range of education expenses—from private school tuition to college, trade programs, and even registered apprenticeships. Plus, some states like Arizona provide an income tax deduction for contributions made to any state’s 529 plan, which makes it a win for both you and your family.
Can kids really have a retirement account?
Yes. If a child has earned income from a job that is reported for tax purposes, you can open a custodial Roth IRA for them. You can contribute up to their earned income or the annual limit ($7,000 in 2025), whichever is lower. Starting this young allows their savings to grow for decades, giving them a powerful head start toward long-term financial security.
How do you introduce kids to investing in a fun way?
One approach is gifting them stock in a company they already know and enjoy—think Disney, Apple, or Nike. When they see their favorite brands in action, investing becomes something they can relate to instead of an abstract concept. As they grow, you can use these holdings to teach them about building a balanced portfolio.
About Brent
Brent Matthew is the founder and CEO of Scottsdale Wealth Advisory, a full-service fiduciary retirement planning firm serving pre-retirees and retirees across Arizona and multiple states. With a strong commitment to always putting clients first, Brent leads the firm in developing comprehensive, tax-efficient financial plans tailored to each family’s unique goals. He is responsible for researching investment, annuity, and life insurance strategies and building smart asset allocations that reflect both long-term growth and risk management.
Brent is driven by a core belief: “The success of this firm will be measured by the success of the families it represents.” That client-first approach has guided his work since the beginning. He is currently enrolled at the College for Financial Planning and is on track to earn his CERTIFIED FINANCIAL PLANNER® designation. He also holds his Series 65 license and Arizona Life and Health Insurance Producers License.
Outside the office, Brent embraces the Arizona outdoors with “lil B” and their two pomskies, Heimo and Kota. Whether he’s hiking, fishing, dirt biking, skiing, golfing, kayaking, or skeet shooting, Brent finds balance and joy in staying active. He’s also a fan of CrossFit, brunching, and cruising the Phoenix canal system on his beach cruiser—usually with classic tunes from the Marshall Tucker Band, Gordon Lightfoot, or Crosby, Stills & Nash playing in the background. To learn more about Brent, connect with him on LinkedIn.
Advisory services are offered by Scottsdale Wealth Advisory, LLC, an Investment Advisor in the State of Arizona. Insurance products and services are offered through Scottsdale Wealth Advisory, LLC. Scottsdale Wealth Advisory, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency, and is not engaged in the practice of law. Be sure to consult with a licensed financial professional to confirm the accuracy of the insurance product you are considering.
