Know Why As a Breadwinner You Should Be the Secret Santa of Your Family

December 23, 2021 Mutual Fund

Just a few more days to go for the Christmas celebration, the season of merriment, and you must have begun planning about Christmas gifts for your loved ones. This Christmas is special compared to the previous year, as a global pandemic has shaped and transformed our lives in several ways, and many of us cannot wait to celebrate the reunion with loved ones and family.

Gifting unique valuable gifts to our loved ones is an essential part of Christmas. One of the most popular holiday traditions, Secret Santa, is a fun and easy way for a group of friends, family members or loved ones to exchange gifts. Secret Santa is a Christmas tradition where you draw random names to become someone’s Secret Santa and gift them on the special occasion of Christmas.

As you plan to pick Christmas gifts for your loved ones, how about you becoming the Secret Santa for your family’s financial future, this Christmas?

Being the sole breadwinner, you must take on the responsibility to become the financial guardian for your family and be prepared for any eventuality. Looking at the current uncertainties, it’s prudent to secure your family’s financial future, and you must leave no stone unturned. Given that, instead of gifting your family the usual traditional Christmas gifts, why not consider becoming the Secret Santa and securing their financial future with unique valuable financial gifts.

Here we have listed some innovative Secret Santa gifts that you can select for your family this Christmas season:

1. Make prudent investments for your family members

It is best to discuss the financial requirements with your family members at first. With this, you will be able to easily list out the financial goals and make worthy investments addressing these goals in the name of your family members. As the sole earning member of your family, you will get an idea of how much you need to set aside for saving and investment purposes and where you can cut down on unnecessary expenses.

In today’s environment, where uncertainties due to the pandemic and inflation are eroding the purchasing power of your hard-earned money, you need to make productive investments that will potentially clock better inflation-adjusted returns. The long-term financial goals like children’s education, their wedding expenses, buying a dream home, a luxurious car, etc., can be achieved with the help of a Systematic Investment Plan (SIPs) in mutual funds.

This Christmas, you may consider gifting SIP to your family members in their name, choosing mutual fund schemes carefully, paying heed to your personal risk profile, investment objectives, the financial goals you wish to address, and the time horizon before the financial goals befall. Such SIP investments in the name of your family members will be a valuable gift, as it will eventually build a corpus to fulfil the set financial goals. There are various types of schemes to choose from – equity, debt, hybrid, solution-oriented, and others – with varied sub-categories therein with a distinctive investment mandate. You can select the schemes depending on your goals.

2. Gift a savings account

You would agree that uncertainties could harm your financial health and family’s future. A pandemic, health emergencies, salary cuts, job loss, etc., can strike without warning. This could create a challenge for your family to run the household, manage debt, and/or pay utility bills during that period. Preparing yourself for unforeseen circumstances is the cornerstone of financial planning.

A contingency fund ensures that you have enough to cover basic living expenses in case of an emergency. While each individual’s emergency fund will be different based on their earnings and expenses, you must have a significant cash cushion for any emergency. Building an investment corpus is vital today, but you also need to create an emergency fund before that, which will create a safety net to maintain your financial stability and secure your family’s financial future.

If you are the only earning member of your family, gifting a contingency reserve will assist you and your family to sail through any unforeseeable event without increasing your debt burden with additional loans. Ideally, this contingency fund should be sufficient to cover monthly expenses for 18-24 months, including EMIs. You can maintain your contingency reserve in a fixed deposit in your family member’s name with a suitable tenure that offers a decent interest rate. You can also maintain a savings account that may hold your reserve safely and is easily accessible in times of need, or you may invest in liquid funds category of mutual funds which offers the safety of capital.

3. Gift the shield of an insurance cover

While a growing number of families are acutely aware of the need to have life and medical insurance, many often let it slide. The current pandemic has been an eye-opener, as you are the breadwinner of your family, safeguarding their financial future is your responsibility. Their financial wellbeing should not be jeopardised in your absence. Thus, ensure you have optimal life insurance coverage for yourself that can address certain financial goals of your loved ones in your absence.

One of the most valuable gifts you can give your family members is an adequate health insurance cover in their name which will help them manage medical expenses in times of need. You may also consider a family floater health plan, which will take care of the hospitalisation expenses of all family members. Individual Family health insurance plans are more suitable for nuclear families.

4. Gift Gold in a unique way

You may consider gifting gold to your family member this Christmas season but in a unique way, not the traditional physical gold. In order to prevent the risk of theft, concerns about the purity of the metal, you can invest in Gold ETFs/Gold saving funds in your family members’ name.

Investing in Gold ETF and/or a Gold saving fund offers convenience to invest in gold at prevailing market price without paying any premium as in the case of buying physical gold. It ensures liquidity, as you can easily exit the scheme at the prevailing market price in the time of need. This will prove to be a valuable gift to your family members and also serve as a good investment option.

5. Gift of knowledge

Christmas is a favourite season, especially for the children, and they await this occasion for gifts. A gift of knowledge will instil financial discipline and enable them to manage their finances efficiently when they grow up.

Depending on the age of the young members of your family, you can select gifts; you may opt for financial board games and books for the children. For the grown-ups in the family, you can teach them to cultivate the habit of investing early and take advantage of the abundance of time they have in front of them to save sufficiently and enhance wealth creation. Invest in their financial knowledge by gifting them a subscription to an online e-course that guides them into the nuances of financial planning. This will be a valuable gift that will enhance their financial knowledge and assist them in the long term in managing their finances, instil good financial habits, and attain financial independence.

In addition, explain to them how they must ensure their hard-earned money is allocated to building assets and wealth creation for a better financial future. Plus, as their age progresses, they may gradually consider focusing on estate planning. In simple words, estate planning refers to passing your assets/investments to the next generation of your family. Life is unpredictable, and thus you need to plan as early as possible and not only consider estate planning after your retirement.

Therefore, as you are the sole breadwinner of the family, you are also responsible for making informed financial decisions for your family’s financial future. It is vital that you guide your young family members on financial planning and assist them in understanding the nitty-gritty of it. However, this will not be successful if you lack financial knowledge, so it is very important for the sole earner of the family to be equipped with financial knowledge.

Similarly, suppose if you wish to be the Secret Santa for your family this Christmas, you should be aware of the value of the aforementioned financial gifts, which is possible if you are financially conscious. You must consider empowering yourself with the weapon of financial knowledge, as it will help you become the financial guardian of your family and guide them in making informed financial decisions.

Financial knowledge plays an essential role in an individual’s life; it assists in making worthy financial decisions that maintain your and your family’s financial wellbeing.

Merry Christmas!

This article first appeared on PersonalFN here