Source: The College Investor
Key Points
- 74% of parents welcome contributions to their child’s college savings over traditional gifts.
- Millennial and Gen X parents show a stronger preference for college savings gifts during the holidays.
- Tools make gifting into a 529 plan or purchasing stock as a gift much easier than ever before.
A new study released by Fidelity Investments reveals a continuing shift in parents’ attitudes toward gift-giving. With the cost of education continuing to rise, many parents are favoring contributions to their children’s college savings accounts over traditional gifts.
According to the research, 74% of parents would welcome gifts to their child’s college savings account in lieu of traditional presents, and 62% would even prefer it during the holidays.
This trend highlights a growing focus on long-term financial planning and educational priorities within families.
Holiday Gifting In 2024
Parents reported that friends and family typically spend about 61% of their gifting budget on traditional gifts or experiences. However, they would prefer a more balanced approach, with 54% allocated to traditional gifts and 46% to contributions to their children’s college savings accounts during the holiday season.
The preference for college savings contributions is particularly strong among younger parents. Millennials indicated a 47% preference for college savings contributions over traditional gifts, while Gen X parents showed a 42% preference.
In contrast, only 49% of Gen Z and 47% of Boomers expressed a desire for such contributions.
Gifting to a 529 plan has been one our favorite ways at The College Investor for families to contribute to college savings. Larger families end up with a lot of "junk" toys and widgets that are rarely used or played with, and that money could have gone towards a lasting impact.
Changing Values Of Millennials and Gen X Parents
The study also highlighted the pressures faced by the “sandwich generation”—those simultaneously caring for their children and aging parents. These individuals are more likely to prefer that more money be allocated to college savings accounts instead of traditional gifts or experiences, with 66% of millennials and 59% of Gen X expressing this preference for their kids.
“Each year, the price of college increases,” the report noted. According to data from the College Board, between 1994 and 2024, the cost of a four-year undergraduate education—including tuition, room, and board—increased by 68% at private colleges and universities and 78% at public institutions.
With college costs soaring, saving for education is top of mind for parents now more than ever, even during the gifting season.
Reflecting on their own experiences, two-thirds of parents said they would have been okay receiving fewer gifts as children if it meant more money was contributed to their college funds.
Despite this, 55% have not considered asking family and friends to contribute to their child’s college savings account because they like to have a physical gift to give in the moment. However, 46% have already asked loved ones to consider such contributions for the holidays.
Related: Ultimate 529 Plan Guide By State
Source: The College Investor
Tools Make Holiday 529 Plan Gifting Easier
For those interested in giving the gift of education this holiday season, Fidelity offers options to open a 529 college savings account with no account minimums and a selection of professionally managed portfolios.
There are also tools like Backer that allow families to connect their gifting accounts to any 529 plan in the United States. Get it: "Backer", where a family can have each other's back when saving for college! Learn more about Backer here.
If you want to give the gift of stock, there are options like Give A Share that can provide a real framed stock certificate (which makes a nice touch on Christmas morning). Learn more about Give A Share here.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.