Your eight-year-olds come bounding down the stairs on Christmas morning with the glow of tree lights in their eyes, looking for the latest Star Wars lightsaber or Princess Leia outfit. But what do they find instead from grandma and grandpa? A letter detailing how they now have a 529 "qualified tuition plan" for the 10 years hence when they'll go off to college.
Children that age might consider this a cruel joke, like Ralphie getting a bunny costume in the movie "A Christmas Story." But parents will be overjoyed, realizing that their future expenses, and the college loans their son or daughter will have to take, could amount to much less.
Here are a few more practical financial ideas to put on your holiday season list. They probably won't make your kids happy -- at least right now -- but they do make financial sense for the whole family.
Almost everyone takes cell phone pictures and video at Christmas, often of the expensive gifts they get like flat screens and interactive exercise bikes. Bob Hunter, director of insurance at the Consumer Federation of America, suggested going even further and photographing everything in the home of value, such as the new computerized refrigerator. Then send it up to the cloud along with those candid stills of the family.
Since this has been afor fires, floods and tornadoes with thousands of residents driven from their homes with only the clothes on their backs, having these pictures enables them to remember what they had -- and to help them prove it to their insurance company when they make a claim.
Buy a "floater"
We've all seen those TV ads encouraging -- and sometimes threatening -- us to buy an expensive piece of jewelry for our special someone at Christmas. You hope the ring will last a lifetime, but if it happens to slip off a finger, all you may be left with is an unpleasant memory.
Spokesperson Michael Barry of the Insurance Information Institute said it could be worth buying a "floater policy" that covers expensive and easily movable property like earrings and necklaces along with the jewelry itself. These types of policies can also be used to protect items such as speedboats and expensive sports equipment.
Read a book
If you believe the "The Habits of Highly Successful Entrepreneurs," here's one way rich people achieve their success: simply reading. Two of the richest men in America do it. Former Microsoft (MSFT) CEO Bill Gates reads 50 books a year, while Berkshire Hathaway's (BRK.A) Warren Buffett spends 80 percent of his day reading.
Talk the tough talk
Many families with grandparents and great-grandparents will bond over eggnog this holiday, and it just might be time to talk about their future, touching on issues like long-term care, guardianship and executors. While it's not always easy, "the sentimental mood may make it easier to discuss," said Jamie Hopkins, a professor at the Retirement Income Program at the American College of Financial Services.
Give more to charity
If you've ever wondered why you received so many solicitations for charities throughout this year, it could be because getting donations will be tougher once the new tax law goes into effect. It doesn't end charitable deductions, but as Chief Executive Brian Gallagher of United Way pointed out, doubling the standard deduction may encourage fewer people to itemize, taking away the incentive for people to donate money to charities. So you might want to give more this year and itemize while you still can.
Invest in yourself
If you're thinking about buying a life insurance policy for your family, you might consider a policy that also gives you something, such as rewards for going to the gym, a free Fitbit watch to monitor your activity progress or a rebate on your premiums for improving your health. Your life insurer has the same interest as you: keeping you alive.
Since the stock market has been on a tear, you might want to offset your gains by selling some of the losers in your stock portfolio. "Tax-loss harvesting can be a beneficial way to reduce taxes," said Hopkins.
Pare down debt
Look at all the high-interest credit card debt you've accumulated by Christmas shopping and pay it off. Since the average American's credit card debt is $5,700 and the average interest rate is 15 percent, you could give yourself an $855 present in 2018.