How to Buy Your Children Christmas Gifts That Last

Christmas gift giving can become a costly ritual, a spending frenzy on presents that are soon forgotten, broken or given away. This year, rather than wasting money on another ugly sweater or techno gizmo for your children, consider filling stockings with holiday gifts that last. We're talking about assets that can appreciate -- and be appreciated -- more each year. So, here's the strategy: Rather than blowing hundreds--or even thousands--of dollars on fluffy what-nots and electronics, earmark some of that money this year for presents of value.

Instructions

Difficulty: Moderately Easy

1. Consider U.S. Savings Bonds. They offer tax advantages and can help a child accumulate money for the future. Key: Stress that they are not to be cashed in until maturity ... both the bonds' and the child's. However, imagine how pleased your son or daughter will be when he or she has the down payment for that first car or money for college ... thanks to you.
2. Consider hard-asset collectibles, such as gold and silver coins, bullion, stamps or art. Many children enjoy collecting. So, doesn't it make more sense to help them acquire a valuable coin collection rather than cartoon character trading cards? (It also helps with gift ideas for the future, as you add to the collection.)
3. Consider jewelry and precious stones. Jewelry from the mall should not be considered an investment; the markup is considerable. However, compared to a cell phone, in-line skates or other token of affection that quickly loses its value, jewelry stands up well against the test of time. Besides, it's a gift daughters (and, yes, husbands and sons, too) can wear and enjoy every day.
4. Consider designer stocks, such as 100 shares of a favorite clothing store or vacation park.
5. Consider a contribution to a Coverdell Education Savings Account (formerly known as Education IRAs). You can currently contribute up to $2,000 a year. More than money, this is the gift of an education. Talk to your financial institution representative or financial advisor for details.
6. Consider single-premium annuities. A one-time $1,000 premium today can grow into a substantial retirement nest egg over the next 50 years! This is truly a gift that can appreciate and be appreciated more each year. Plus, annuity earnings are tax-deferred.
7. Consider juvenile life insurance, which can be purchased with either a single premium or ongoing payments. The premium will never be lower. Plus, as cash values grow in the child's policy, they can be used to help pay college costs, provide a down payment on a first home, or assure protection for a family of his or her own someday.