MISSISSAUGA, ON, Dec. 16, 2015 /CNW/ - They say money can't buy happiness, but does it make a suitable holiday gift? According to a new poll conducted by investment dealer Edward Jones, the answer is yes— depending on the recipient. The majority of Canadians surveyed feel it is appropriate to give cash as a gift to their children (60 per cent) or grandchildren (60 per cent). However, fewer people (39 per cent) are comfortable giving cash to other family members, and even fewer to their spouse (23 per cent) or a friend (23 per cent).
When asked who's likely to see the biggest windfall this season, not surprisingly the survey revealed that children are named most often (41 per cent) followed by spouses/partners (27 per cent). Fewer than one in ten mention Mom (eight per cent) and even fewer list a sibling (five percent). The biggest loser is poor old Dad - only one out of a hundred people say he tops their gift giving list.
"Canadians tend to spend the most on their children, and cash makes for an easy, acceptable and often desired present," says Patrick French, director of financial and retirement planning with Edward Jones. "However, parents and grandparents may want to consider taking this gift a step further, and give children some practical advice when handing over an envelope of money."
For those planning to give children or grandchildren cash this holiday season, Edward Jones suggests the gift should be accompanied by some advice:
Teach children how to save – When giving children cash, help them understand the difference between saving and spending. Many suggest dividing money into three pools – one for spending, one for saving, one for giving.
Explain principles of investing – Even fairly young children can comprehend what it means to invest in stocks, if it's carefully explained to them. Use examples of the companies with which they may be familiar, like entertainment companies, consumer packaged goods, or fast food restaurant chains— and stick to the basics.
Align a monetary gift with a child's future goal – For example, if attending college or university is a goal for your child, consider making a contribution to a Registered Education Savings Plan (RESP). With an RESP you can put aside money for your child's or grandchild's post-secondary education, and RESP owners are eligible for the Canada Education Savings Grant, which, at a minimum, provides 20 per cent on every dollar of the first $2,500 contributed to RESP each year.
Encourage them to save for the future – It's not just youth that benefit from monetary gifts this time of year. For adult children, it is worth a discussion around setting up a Registered Retirement Savings Plan (RRSP), as this is a great way to encourage them to think long-term. Your children might also consider a Tax-Free Savings Account (TFSA). Every Canadian resident who has reached the age of majority can contribute to a TFSA, which serves as a convenient tax shelter.
"Parents can lead by example by showing children how they save and invest, and by using real-life examples, such as how they bought a new car or home," adds French, "Becoming financially savvy at an early age is key to developing a financial foundation for life. At Edward Jones, we believe it's never too early to learn the benefits of saving and creating solid financial strategies."
This news release presents the findings of an online survey conducted among 1,004 adults from Friday, November 27th – Sunday, November 29th, 2015. In order to qualify for this survey respondents had to be 18 years of age or older and reside in Canada.
SOURCE Edward Jones
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