Give the gift of financial freedom

By Julie Nipperess.

No, I don’t mean you should go about handing out wads of your hard earned cash this Christmas! But, have you ever considered giving someone a managed fund, or a session with a financial planner? Both have the power to transform lives, and they’re not as expensive as you think.

Gift giving

Australians love to give

Research shows that Aussies love to give. A study published by the Financial Planning Association (FPA) a few months ago shows that collectively, each year, we spend almost $20 billion dollars on gifts for other people. This spending, on average per person, equates to about $100 a month… It is in fact, more than we spend on coffee or getting our clothes dry cleaned. It is more than we spend on our mobile phone plans!

The research also shows that we love it. We find joy in giving, and we like to be generous with our loved ones. Psychologically, giving is good for us, too – it establishes and nurtures our connection with each other and helps us to express how we feel.

The study also showed most of us – almost two-thirds – don’t budget this gift money.

Uh oh. Most of you who know me, know I could write an entire blog on that subject alone – $100 a month is a LOT of cash not accounted or planned for … but that’s a subject for another time. (Maybe even next week.)

My particular point in amongst all of this, is: What if you looked at gift-giving in an entirely different way? Particularly those of you who have children, teenagers or young adults to buy for this Christmas?

A managed fund

A managed fund

A managed fund is pretty easy to set up and can be started with as little as about a $1000. If you can’t afford that much, you could consider pooling funds with other friends or relatives to get started.

The idea of a managed fund is that your investment sits for the medium-to-long term. Over time it will turn into a nice little nest egg that one day might be useful for purchasing a car, travelling, paying for study, a wedding, or putting towards a property.

This is far more useful than clothes, a subscription to Spotify, eyelash extensions, or whatever else it is that young people yearn for. What’s more, it can help both children and young adults to learn a thing or two about finances – concepts like compound interest, fees and the various cycles of investments and the share market.

You can even personalise managed portfolios so if your intended recipient is a technology lover, consider shares in Apple, or Microsoft or an app development company that they can take an active interest in. You can choose fashion brands, retailers, biotech, environmental science and more.

And, over time, maybe at the next birthday and future Christmases, you can contribute a little more money on their behalf and keep the fund growing. And encourage other family members and friends to do the same. Managed funds are perfect for any age.

A savings account

A savings account can be opened with less cash than a managed fund; just make sure you choose something that’s not easily accessible. Banks aren’t offering fantastic interest rates right now, and it looks like they will stay low for a while to come, but even so, all of the same principles apply. As long as the money stays in the account, one day, when the time is right, the cash can be put towards something useful.

A session with a financial planner

A session with a financial planner

Another idea that’s also really affordable is an introductory session with a money coach. I know, it might sound a little on the dull side compared to an iPhone 11, but if you have a teenager with a part-time job, helping them to learn how to budget and save for future goals as well as the benefits and pitfalls of credit cards and Afterpay and other purchasing schemes, as well as how and when to use debt and work towards a great credit score, can be invaluable.

It can also be fun, and engaging. In fact, one of my youngest clients (a teenager) likes to tell anyone who will listen that “she earns money in her sleep.” She’s hooked on the idea of her future prosperity.

It’s like that old saying – if you give someone a fish, they will eat for today. If you teach them how to fish, they will have food for life. A little money counselling and education certainly goes a long way.

Conscious gift-giving

Conscious gift-giving

We’re all a bit worried about the current state of the planet, so how about NOT opting for shiny plastic toys or gift cards this year, and forgetting all about the wrapping paper, cards and ribbon, too?

A fund or a financial planning session is a gift that is not just empowering, it’s life-enhancing.

The truth is, that when we reach our 30s, 40s and 50s, most of us wish we’d had a leg up financially at some point, or a little bit of money knowledge long before we actually needed it.

Life is expensive, and it will only get more so. I don’t like to be a pessimist, but the nature of work is changing, quickly. The lending landscape and the future of money are also changing. Technology is disrupting most of what we have known in our lives so far.

The fact is that our young people face an uncertain future on some fronts. Giving them a managed fund, or helping them to get a ‘money education’ will provide them with financial security in a world that’s currently, and for the foreseeable future, in a state of flux.

A gift for life

You don’t have to be wealthy to become wealthy. Small, incremental, consistent steps towards a financial goal will pay off over time. The trick to becoming financially independent is learning to have control over your money, rather than letting it control you. You don’t need a degree in maths, either – you just need to learn to make wise money choices. And these are skills we’re never too young, or too old, to learn.

So, if you’d like to give the gift of financial freedom this Christmas, I promise, it’s easy to do. And way less hassle than hitting the mall. Just contact us.

This is general advice and should not be treated as personal advice. Julie Nipperess is an authorised representative of Step Up Financial Group Pty Ltd ASFL No: 512509.

Need more information? Get in touch with Step Up Financial

    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445