Looking a gift horse in the mouth
Giving while living - helping the next generation now
If there's one conversation that comes up in almost every client meeting lately, it's this: "We want to help the kids."
We get it. The cost of living is brutal. Housing prices are eye-watering. Your kids are doing everything right and still struggling to get ahead. Meanwhile, you're sitting on assets you may not need for years and watching them stress.
Of course, you want to help. The real question is how.
Gifting isn't just about cash
When we talk about helping the kids, most people jump straight to handing over a lump sum. But some of the smartest gifting we've seen doesn't look like that at all.
One of our clients pays for his adult children's life insurance every year. The premiums aren't cheap, and his kids have young families. So instead of giving them cash they might just spend, he's protecting them and their kids if anything were to happen. It's practical, it's meaningful, and it's something they probably wouldn't prioritise themselves.
Another client set up education bonds for the grandchildren. Not flashy, but every birthday and Christmas, instead of more plastic toys, money goes into their future education. By the time they're ready for uni or a trade, there's a solid foundation there.
And then there's the gift of time. Nicole's mum is about to start volunteering at her grandson's school canteen. She's under 67, retired, and doing her 15 hours a week to meet her Newstart requirements. She gets to be part of her grandchild's life in a really hands-on way, the school gets help, and she qualifies for some Centrelink benefits. Everyone wins.
The point is, gifting doesn't have to mean a big transfer of funds. Sometimes it's covering specific costs, setting up structures, or just showing up.
The stuff you need to think about first
Before you gift anything substantial, there are a few things worth considering:
Your own future security. The oxygen mask rule applies here - make sure you're sorted first. Ensure your financial future is secure.
Centrelink and the pension. If you're receiving (or might receive) the Age Pension, gifting has rules. You can give away $10,000 in a financial year, or $30,000 over five years, without it affecting your pension.
Relationship breakdowns. Nobody wants to think about it, but if your child's relationship doesn't work out, half of your gift could walk out the door with their ex. There are ways to structure gifts to protect against this.
The best kind of gifting
From what we've seen, the gifts that work best are:
Specific and purposeful. Helping with a house deposit, funding education, paying off a specific debt - not just handing over cash for "whatever."
Discussed openly. The families who do this well talk about it. Not in a lecture-y way, but genuinely - here's what we're thinking, here's why, here's what we'd love to see happen.
Part of a bigger plan. Not random acts of generosity, but thought-out decisions that fit with your overall financial picture and theirs.
Where to from here?
If you're thinking about helping your kids financially, that's a great conversation to have with us.
Because the goal isn't just to give money away. It's to help the people you love build good lives - while making sure you've still got yours sorted too.
Join Frankly Speaking
Sign up to receive our monthly newsletter - where the team at Firefly Financial tells it like it is about all things money, life and everything in between.