Parenting & Family

What do you do with monetary gifts received for your child?

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  • Feb 7th, 2019 5:05 pm
[OP]
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Nov 9, 2011
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Toronto

What do you do with monetary gifts received for your child?

During the holidays, new year and his birthday - my son received a significant amount of red envelopes. I have been stashing it under the mattress for him. But recently I started to wonder - what will I be doing with his money? Give it to him when he turns 18? Use it to buy his first car?

I asked my siblings and they said they put it toward their children RESP, which is a good idea - but my son already has an RESP plan.

What do other parents do with their child's monetary gifts? If you are giving it to your children, when? On what occasion?
42 replies
Deal Addict
May 1, 2018
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I used them to buy toys and needed things like clothes, shoes, etc.
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Aug 16, 2009
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Open an account for them and put the $$ in there. RESP contributions comes from our pocket, not theirs.
Deal Expert
Aug 22, 2011
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We use the money to buy them toys and clothes.
Banks don't offer child accounts any longer
[OP]
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Nov 9, 2011
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Lots of suggestions about putting into an account/saving. But when would we give them the money?
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Jan 9, 2011
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tonershop wrote: During the holidays, new year and his birthday - my son received a significant amount of red envelopes. I have been stashing it under the mattress for him.
So you've been taking it away from him? Give it back now. It was given to him, not to you. Whether he wants to put it into a savings account, or spend it on something useful, or blow it on useless crap, let him. The best way to learn financial literacy is by doing it yourself, which includes learning from your mistakes.
[OP]
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Nov 9, 2011
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Kiraly wrote: So you've been taking it away from him? Give it back now. It was given to him, not to you. Whether he wants to put it into a savings account, or spend it on something useful, or blow it on useless crap, let him. The best way to learn financial literacy is by doing it yourself, which includes learning from your mistakes.
He is an infant and I am not talking about $5 or $10..
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Dec 11, 2003
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You said that your son has an RESP already. Don't you make annual contributions? It doesn't matter if the answer is yes or no. Just put it into his RESP account. Since he's an infant there is no need to start a savings account for him yet. If he's an infant then how much could you have under the mattress? $200? Just put it wherever. I'm sure you'll give it all back to him in one form or another. When he wants to go to the movies with his friends you might give him like $20, and so on.
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[OP]
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Nov 9, 2011
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Toronto
ds2chan wrote: You said that your son has an RESP already. Don't you make annual contributions? It doesn't matter if the answer is yes or no. Just put it into his RESP account. Since he's an infant there is no need to start a savings account for him yet. If he's an infant then how much could you have under the mattress? $200? Just put it wherever. I'm sure you'll give it all back to him in one form or another. When he wants to go to the movies with his friends you might give him like $20, and so on.
Yes, I make monthly contribution to his RESP and it is budgeted for. I don't want to put his gift money toward his RESP as I want him to have something "extra" - in addition to his RESP.

He gets around $1,500 to $2,000 a year in gifts from relatives and friends - depending on the year. If I put it toward a GIC with annual addition of $1,500 plus compound interest - it would be around $38K in 18 years.

I am just wondering what is the appropriate occasion to return the money to him. Or at what age should I return his money to him and let him manage it?
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tonershop wrote: Yes, I make monthly contribution to his RESP and it is budgeted for. I don't want to put his gift money toward his RESP as I want him to have something "extra" - in addition to his RESP.

He gets around $1,500 to $2,000 a year in gifts from relatives and friends - depending on the year. If I put it toward a GIC with annual addition of $1,500 plus compound interest - it would be around $38K in 18 years.

I am just wondering what is the appropriate occasion to return the money to him. Or at what age should I return his money to him and let him manage it?
Holy crap. That's a lot of money. I would start off with a Simplii savings account until you decide where to put his money then. The mattress is no place for money. Some of it you could put away into an RRSP account as well as his RESP. I'm sure he'll appreciate the RRSP account later on in life.
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[OP]
Sr. Member
Nov 9, 2011
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Toronto
ds2chan wrote: Holy crap. That's a lot of money. I would start off with a Simplii savings account until you decide where to put his money then. The mattress is no place for money. Some of it you could put away into an RRSP account as well as his RESP. I'm sure he'll appreciate the RRSP account later on in life.
LOL stashing it under the mattress is just a figure of speech. I converted all his gifts into USD last year - thinking USD might worth more than CAD in a few years.. But now it seem like it is too much work. I might as well convert it back to CAD and put it in a Simplii TFSA GIC.
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@tonershop Our kids get a lot of money from family for presents, some of the gifts were specifically requested to help with their future education, but we also have earmarked the RESP contribution from us. When they were little (infant/toddler), we put it in a high interest account, then when the amount got to something worth investing it went into INFOMAL in trust account. As they have gotten a little older about 6/7 years old, we gave the money directly to them. Since they were about 3/4 we had them always split up their money in to Save, Give, Spend. They do the same now with cash presents. Money now in their Give, goes to a charity of their choice and research through out the year, and save goes into their investment account for the future. We have been just been teaching them about compound investments this year, so I will be having them make more decisions on their in trust accounts, and will be setting that up soon. I haven't quite decided if I am going to have them just do index investing, couch potatoes, or equities yet.

So our answer is keep it in a high interest account until it builds enough for you to start investing, and then have them do it. In terms of the question of when to 'give' it to them, when we get money from relatives, I show them that I have deposited it into their accounts. They see the physical transfer. For there birthdays they each received a few hundred dollars. It was given to them, they split it up, and then I transferred the money they wanted in the bank, they kept the 'spend' and 'give' in their jars as they both know they will be shopping after Xmas.
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ds2chan wrote: Holy crap. That's a lot of money. I would start off with a Simplii savings account until you decide where to put his money then. The mattress is no place for money. Some of it you could put away into an RRSP account as well as his RESP. I'm sure he'll appreciate the RRSP account later on in life.
Unfortunately, Simplii has stopped offering new accounts to minors (children account), after the change over from PC Financial. Tangerine is still an option.

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