Attending college is an expensive endeavor for students, and while the student in your life may ask for impractical gifts every year around the holiday season—there are more meaningful presents you can give, those that will ensure them a stronger financial future. Consider the following monetary gifts for students as a means of ensuring they learn financial literacy before they’re out in the real world, while simultaneously helping reduce the debt they might carry after graduation.
Contribute to an RESP
For the pre-college student, this one is obvious. An RESP (Registered Education Savings Plan) ensures there will be the money for schooling available to them when they’re ready for post-secondary. You don’t have to be a parent to set one up, either. Grandparents, aunts, uncles and family friends are able to give this gift as well. The gift of graduating debt free is the gift that truly keeps on giving.
Set Up an Appointment with a Financial Advisor
A gift like this is one of the best gifts for college students, as it is an investment in their future, giving them a head start on the financial education they won’t find elsewhere. An advisor can teach them what they don’t know, and guide them in the right direction when it comes to debt repayment, savings, investing and more.
Make a Charitable Donation in Their Name
A charitable donation to an organization they love and wish to support is a wise way to teach them the value of putting income to good use—something they are better off learning now rather than later. Ask them if they have a favourite organization they would like to support—or find a cause they are passionate about and look up legitimate charities donating to that cause. This gift also provides a financially beneficial tax write-off that will help with taxes when that time of the year comes around.
Set up a Tax-Free Savings Account
A Tax-Free Savings Account contribution is a great gift idea for university students, as this money will contribute to their long-term goals. It’s never too early to have one, and your help setting one up, and the initial contribution, will teach them a lot about financial security while helping provide for their future.
Buy Them a Canada Savings Bond
Like a TFSA, a Canada Savings Bond is truly the gift that will keep on giving long into their future. Consider buying one every year, as the ultimate Christmas gift for the student in your life, rather than something they will likely stop using early into the New Year. Students underestimate how expensive life can be, and this gift will help them meet their financial goals earlier than many of their peers.
Buy Them a Membership to a Professional Organization
Professional members’ only organizations can sometimes be expensive, but when it comes to networking and fast-tracking one’s chosen career, they’re a very wise investment. The student in your life likely can’t justify these large expenses yet, but having access to organizations like The Soho House or the local Guild in their chosen field will benefit their career—and therefore their finances–for years to come.
A Low-Limit Credit Card That Helps Them Build Credit
Consider gifting them with a BMO SPC Mastercard under their own name, that you agree to pay for a limited period of time in order to help them build up their credit. Their credit score and report will matter quite a bit once they are out of school and into the real world—and having a head start will ensure they’re at the top of the pack when they eventually want to rent or buy a home or make another large purchase. Take this time to explain in detail how credit works, how important keeping a good score is, and the perks that come with paying it off early and regularly. When the time period you agreed to cover is over, transition the bill over to them. The SCP card also has specific benefits just for students, including discounts of up to 15% at retailers across Canada–making it a solid choice for a first time credit card.
An alternative option is the Home Trust Secured Visa, which requires a deposit in order to activate. You can put down a specific amount (from $500.00 to $10,000.00) and allow your student to take over the card completely from day one. They will have the gift of the initial deposit that is already paid for, and from there they can start taking control of their credit, paying their bill and learning about how credit works in a hands-on way.