Is gifting money for Christmas a good present
I don’t know about you, but I have noticed that the older I get, the busier I am, the faster the time passes. And in no time at all, here is another Christmas to celebrate.
As much as I’ve always loved Christmas, I have noticed also that the older we get, the more difficult it is to buy presents. Often I don’t know what to buy, but also what is the appropriate value for a present?
So I have been thinking, maybe money is the best option?
So is gifting money is a good present for Christmas and if yes, why this would be the case.
1. Giving money takes away the risk of giving a bad present
Sometimes it is impossible to know what the best present is for your loved one. Personally, I don’t want to buy a present out of obligation. I want the person to enjoy it and have a use of the present. If I don’t know what to buy, then the best option is to leave the decision to your loved one. This way you cannot give a bad present and the person receiving the money can make a choice as to how to use the gifted money.
2. It gives the recipient the gift of saving
If you know that someone is seriously saving for a special item, for example a big holiday, home deposit, car then your money could be very welcomed as a Christmas present, rather than buying a pair of socks or a set or plates that are not necessary at all. In this situation, gifting money is actually a very thoughtful present.
3. This is totally tax free money
There is no gifting tax in Australia, therefore your kids, grandkids niece or nephew can enjoy your money present, without worrying about any tax obligations.
4. Your money presents can actually help someone who might just really need it.
Christmas is the time of kindness and goodwill, so if you know someone is struggling financially, don’t buy then a present. Money gift can go such a long way and you will really show you care.
If you are giving money to children as a present, don’t over do it, just because you can. Children need to learn the value of money. It is not how much you give them that is important, but what they can do with the money received.
One of the best things, I think parents or grandparents can do for their little bundle of joy is to open an investment account, that can grow over the period of time and can create a nice starting balance when they are 18 or 20 to either pay for unit, buy a new car, have extra money for a home deposit or this amazing trip around the world.
However, you need to be aware about the tax system in Australia for minors and what investments are the best option for such occasions.
By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement
