Financial Gifts for Grandchildren

IN my most recent column (see “Money Smart Women,” July), I offered advice from readers on creative ways of giving gifts to their grandchildren. As promised, I'm following up this month with ideas from readers who focus on financial gifts to teach their grandkids long-term lessons on saving, investing and managing their money.

- MONEY SMART WOMEN BY JANET BODNAR

Kicking things off is an email from Barbara Mitchell—known as “Bubby” to her seven grandchildren—in which she explains how she set up “Bubby’s Money Savings Challenge” for her four school-age grandkids during the December holiday season. Each child received $50 to open a high-yield, online custodial savings account. The challenge was to save as much money as they could throughout the year from their allowance, chores, and birthday and holiday gifts. Bubby offered to match their savings dollar for dollar up to a maximum amount of $300, and the child who put away the most cash during the year would also win a $100 cash prize to spend any way he or she chose.

Mitchell’s plan is noteworthy because it incorporates strategies popular among many readers, such as setting up custodial accounts and offering a savings match.