Are you at a loss for what to give your loved ones for the holidays, their birthday, or even just a special occasion? Shopping for another knickknack that conveys how you feel can be an arduous process – and they may not like what you select. On the other hand, financial gifts are a timeless choice that requires no shopping or guesswork on your part.
No matter how much you want to give, financial gifts are a great way to show someone you care about them and set them up for future success. Here are some ideas for giving your loved ones the gift of financial freedom.
Why Give Financial Gifts?
Financial gifts impact a person’s life and help them achieve their long-term goals. Whether they want to buy a house, save up for a car, or purchase a more expensive item for themselves, giving them a financial gift sets them up for future success and helps them achieve their dreams. Money is the gift that keeps on giving.
Plus, financial gifts are something that you never outgrow. Unlike gadgets and clothing, it won’t go out of style or be rendered obsolete six months from now. Money doesn’t clutter up a home, and it won’t find its way to the thrift store this time next year.
Of course, there is a benefit to you as the gifter as well. You can take the annual gift tax exclusion as you transfer wealth to your family and reduce your taxes. In 2024, you can give up to $18,000 per person. You get to see your loved one enjoy the gift and lessen your own taxes later down the road.
The first financial gift that comes to mind for most people is simply to give cash. Giving money this way makes it highly flexible, which is a great gift for anyone at any time. They can spend it as they see fit whether that is toward a down payment or even paying down debt they accumulated over the years. They can even put it in a high-yield savings account where your gift can grow.
Bonds are another easy way to contribute financially to a loved one. There are lots of different types of bonds you might consider as financial gifts, and you might already be familiar with some of them.
Here at Worthy, bonds are our area of expertise. Worthy bonds only require $10 to get started, making them great for every budget. There are no minimums or fees, and you don’t need to go to a broker or dealer to get started – it’s as simple as opening an account on your phone or laptop.
Worthy bonds come with flexibility and liquidity like cash, and with our competitive interest rates (7% APY as of January 2024!), they also hold the potential for long-term growth!
Other types of bonds you could give include savings bonds, treasury bonds, municipal bonds, and corporate bonds. Different bonds come with different rules, such as minimum purchases or a required holding period, so read up on the details before purchasing any as a gift.
Stock is another great financial gift option, as it can bolster a loved one’s financial portfolio and help them diversify. Think about what companies they may be interested in and give them stock they would be happy to include in their portfolio.
This can also be beneficial for your portfolio and personal finances. When you give a stock that you already own, you can forgo capital gains tax if it yielded a profit from when you initially bought it. Someone else can benefit from your savvy investments and it won’t cost you a dime.
529 Plan Contributions
Sometimes, you may have younger people on your list of presents to buy for and it may not make sense to give them cash or stocks. Instead, you can contribute to a 529 savings plan that sets them up for financial success (and potentially helps them avoid taking out loans) when they want to pursue higher education. You may benefit from these contributions with tax deductions and credits, depending on your state.
Not to mention, withdrawals from a 529 savings plan are tax-exempt for your giftee as long as they are used for a qualified educational expense.
Financial Literacy Materials
Sometimes, it’s important to make sure that your giftee has the right money mindset to truly appreciate a financial gift. Instead of giving cash, you might decide to give the gift of financial education.
For example, this can include books on personal finance or online course subscriptions. If the person you’re gifting is interested in learning how to manage their own finances, this is a valuable gift that will serve them for years to come.
Financial literacy materials can also pair nicely with other gifts like bonds or stocks. They can read about these financial items and learn hands-on how to manage them at the same time.
Maybe your giftee doesn’t really need any financial help but you still want to do something more meaningful for them. In this case, your financial gift can be to support a cause they care about and make a charitable donation in their name. Charitable donations may also come with tax benefits for your end-of-year finances that can make this gift even more impactful for you.
Give a Financial Gift that Keeps on Giving
If you want to give your loved one a gift that keeps on giving, Worthy can help. Gifting Worthy bonds to your loved ones is easy, and your lucky recipient will get to enjoy an investment that grows at a competitive rate of 7.0% APY. Whether your giftee wants to hold it to maturity or cash it in, our Worthy bonds come with flexibility for everyone.
When you buy Worthy bonds, you’re also supporting local communities! Worthy bond proceeds are used to provide secured loans to community real estate projects – which help strengthen local economies.
Check out our planning calculator to see just how much impact your gift could make. When you’re ready to give your loved one a financial gift, get started with a Worthy Bonds account and start giving!
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