Christmas is the season of love, joy, and plum cakes. While folklore has it that Santa delivers gifts to children, individuals also surprise each other with gifts by being the secret Santa.
While gifts can be anything from gadgets to clothes, one valuable gift would be the one that helps secure the receiver's financial future.
So here are five financial gifts you can give to your loved ones.
Health insurance: As healthcare becomes costly, health insurance is crucial. If someone does not have health insurance, it can make for a great gift and help the receiver save taxes. A one-time gift like this can make someone realize the importance of health insurance, and the person may renew the policy in the coming years.
Emergency fund: "If a person's major risks are sorted, only then can he chase returns and wealth creation. An emergency fund is needed for unknown situations. If this is taken care of, then one can easily plan for controllables," says Anant Ladha, founder of Invest Aaj For Kal, a financial planning firm. Funds to build an emergency corpus can be an excellent Christmas gift. While it is recommended that an emergency fund be equal to six months of one's expenses, even a small contribution can provide the impetus for someone to build an emergency fund.
Mutual fund SIPs: A mutual fund SIP can also be a great Christmas gift. "When we start a new SIP, we are ready to give ten years, but as soon as volatility hits and we see that our last five-year returns are negative or below FD returns, we end up ruining the process. So then the best gift will be a SIP in a person's name which he will only get to know about after 10 years," says Ladha. Such a gift would make perfect sense when coming from a parent or a grandparent.
Gold: Gold is immune to the vulnerability of the markets. While one can gift gold coins or jewelry, one can also give gold ETFs or sovereign gold funds. In the latter case, one does not need to worry about gold's storage, safety, and quality. Over the long term, it has been seen that gold has given reasonable returns.
Financial knowledge and wisdom: The gift of knowledge is perhaps the most valuable gift you can give someone. While there are a lot of books on personal finance you can gift someone, you can also introduce them to the wealth of personal finance resources on the internet. Such knowledge can help instill financial values which can stand a person in good stead. "For example, we often equate spending to having happiness. In truth, the joy led by impulsive shopping only leads to guilt later, which turns into a vicious cycle. So, the ability to focus on spending on meaningful things and experiences rather than temptations is a value that can be taught," says Shweta Jain, CEO, and founder of Investography, a financial planning firm.
Such financial gifts will bring joy for example, we often equate spending to having happiness. In truth, the joy led by impulsive shopping only leads to guilt later, which turns into a vicious cycle. So, the ability to focus on spending on meaningful things and experiences rather than temptations is a value that can be taught," says Shweta Jain, CEO, and founder of Investography, a financial planning firm.
Such financial gifts will bring joy for the moment and for years to come.
