The possibilities for non-cash gifts

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Gift

Potential benefits and pitfalls

Health

 

Health insurance

With health care costs increasing, the need to be effectively insured is becoming more critical, even for the young and healthy.

Gym membership

Exercise is so good for the body that it might just leave health insurance happily un-used.

Education

 

Tuition, books, etc.

Many people graduate from college loaded with debt. Helping children avoid debt could give them a tremendous financial advantage as they seek to turn their education into a career.

Private school

Public vs. private? Parents who feel that private school is the best option for their child often struggle to handle the hefty price tag that comes with it. Paying for or supplementing tuition could create financial breathing room for your child and enable unique educational opportunities for your grandchildren.  

College fund for grandkids

College tuition isn’t going down anytime soon. A young family’s neglect to start saving now could create stress and regret later on.  States such as Texas offer prepaid college tuition plans, or you might consider establishing an education fund for your grandchildren via a 529 plan. These plans allow savings to grow tax-free if used for qualified college expenses.

Quality of life

 

Family vacation

A gift you can include yourself in! The memories of a special vacation could last throughout multiple generations.

Financial

 

Pay down credit card debt

Credit card debt is a serious financial overhang for many young people. Getting out from under it could make a huge difference, as long as it is not simply built back up again. Effective budgeting needs to go hand-in-hand with this gift.

Living at home

This is becoming increasingly common and can be of great value to a young adult who needs to build up a nest egg. It’s important to think about whether the arrangement will be rent-free, include food, utilities, etc.

Retirement contribution

The notion of retirement is often neglected by young people. Taking advantage of decades of compound growth before retirement is extremely beneficial.

Help buy a new
family car

Assuring reliable family transportation can add safety to one of life’s necessities. 

Down payment on a home

Helping your child buy a first home (or pay down an existing mortgage) could help them establish an asset that builds wealth and pays quality-of-life dividends for years to come. Be sure to anticipate possible career-related moves before going this route.

 

Date: April 2, 2013