Celebrate This Diwali with 7 Great Financial Gifts for Your Loved Ones!

Priya replied, "You know purchasing gifts for our loved ones is so confusing! Like, you want to gift them something unique, but also it has to be something that's useful to them."

I asked, "Have you guys thought about financial gifts for your loved ones?"

Rahul inquired, "What do you mean by a financial gift? Like gifting some cash?"

I replied, "A financial gift is something that provides financial security to your loved ones. Cash could be an option, but basically, financial gifts refer to gifting a financial instrument that can brighten their financial future."

Rohini said, "Ohh, that's a good alternative from the traditional presents such as gadgets, clothes, sweets, and gift cards, etc. A financial gift will provide potential benefits beyond their material purpose."

Rahul asked, "Mitali, what is the best financial gift? Could you please explain this in detail? And we can plan to purchase financial gifts this Diwali."

COVID-19 pandemic affected the financial life of many individuals, so consider giving your loved ones a financial gift this Diwali. It will assist them to maintain their financial stability. And what could be a more unique gift for your loved ones than a financially secured future.

Gift or invest in a financial instrument in your loved ones name that could help them in times of need and support their financial future. These kinds of financial gifts can provide a strong foundation for the future today as they have the potential to grow in value over time.

Given that, depending on the type of financial gift you choose, it could also help your gift recipient increase their financial literacy, as well as fulfil specific needs.

Here are some financial gifts you may consider to gift your loved ones this Diwali:

1. Gift a savings account

You may consider opening a savings account in your loved ones name by depositing a certain amount as a gift. It could be ideal for your younger cousins who may have just started working or pursuing their career. They can easily deposit their money in the account. It will instil a good financial habit of saving regularly and growing a corpus to survive in tough times.

It is very easy to open a savings account, especially for millennials; you could simply use online banking. Opening a savings account in your loved ones name is at your fingertips. It will also help them to utilise the convenience of e-wallets, mobile banking, etc.

Apart from your family members, you could also extend a helping hand and gift a savings account to your domestic help who takes care of all your household chores. As they take care of your family, you could do the same for them. Make their Diwali special, and help them build a corpus in their savings account for rainy days.

2. Be a pillar of support

As you know the cost of healthcare is ever increasing, many have seen the threat to one's life amidst the pandemic crisis. It becomes essential for an individual to consider the term insurance plan for life and health. So, if you haven't optimally insured yourself or your family, you can gift them a health and life insurance cover by paying the premium, it would be a valuable gift.

Choose an optimal medi-claim policy with worthy features. This financial gift will be most helpful as the inflation on medical care is skyrocketing. You can gift an insurance plan to your parents, your in-laws, and loved ones for a financially secured future. An adequate insurance cover will help them fulfil their financial requirements in times of crisis and in your absence. This is one way you can ensure the financial-well-being of your loved ones.

3. Gift an umbrella for rainy days

You may consider gifting an emergency fund for your loved ones; it will be an umbrella to protect them from any uncertain event in future. An emergency fund is a safety net that helps you maintain financial stability during crisis.

Many of you may receive Diwali bonus as a surplus to your regular income and you can sensibly deploy a certain amount to boost the emergency fund in your loved one's name. Assist them in understanding the importance of a rainy day fund and how to maintain the fund.

4. Invest in Gold ETF

Gold is a very popular asset class around the world, and in India it is considered a most auspicious gift on such special occasions. During Diwali, there is usually a rise in demand for physical gold. Laxmi pujan is one of the days where you worship the goddess of wealth Laxmi, and hence, many individuals prefer to buy or gift gold on this day.

So, gifting your loved ones a Gold ETF instead of physical gold this Diwali will be a good idea. You can invest in gold ETFs and/or gold mutual funds in their name and gift them gold in a unique way, by investing in these paper gold investment avenues, which will increase in value with time.

Physical gold carries high holding cost, including making charges. and the risk of storage. Investment in a Gold ETF will secure their financial future because gold as an asset class has proven to be a saviour in times of economic crisis and volatile market conditions.

5. Gift a box of new beginnings

Gifting a box full of sweets is a very common ritual; many of us receive a variety of sweets in Diwali. How about adding investment avenues to this box of sweets for your loved ones this Diwali? You may consider investing in new beginnings for your loved ones by investing in various investment avenues. A productive investment avenues will allow them grow their wealth and achieve their envisioned financial goals.

A SIP in mutual funds will prove to be a worthy financial gift that can support their goals of planning an exotic vacation, saving for their wedding, purchasing that dream car, a retirement corpus, etc. A SIP in a mutual fund will allow you to invest a certain amount regularly with monthly/quarterly intervals and build a large corpus systematically.

Instead of the cash gift you plan to give them on Diwali, you could invest in a SIP for your loved ones with an amount as low as Rs 500 or Rs 1,000 a month. Eventually you may even gradually increase the amount with 'Step-up SIP facility'. However, mutual funds are market linked and carry risk, so assess your risk appetite and select worthy mutual fund schemes with proven track record.

Diwali, apart from being the festival of lights, is also the festival of prosperity. This is the reason many investors prefer to start their investment journey during the festive season. So, this Diwali you can gift your loved ones a mutual fund investment that and/or assist them in investing in various investment avenues that can create a wealthy portfolio and brighten their financial future.

6. Assist in reducing debt burden

As Diwali brings light to the darkness in our lives, a financial gift that reduces an individual's debt burden will bring light to their financial life. This can enable them to be in the pink of their financial health. You see, uncertain times or crisis can lead anyone to make the wrong decisions. Amid the pandemic, many have borrowed loans to fulfil their financial requirement without considering that it may create a debt burden.

Having a debt is not bad, but you should be able to repay it on time to avoid a debt burden. Helping your loved ones get out of a debt burden or contributing to reducing their debt can be a thoughtful Diwali financial gift.

You may also help them understand how to manage their money better and become cautious, to avoid falling into any debt traps. Maintain your debt-to-income ratio below 40% to have more financial stability and less stress.

7. Gift the weapon of financial knowledge

Gift your loved ones the most unique and beneficial gift ever! Invest to enhance their financial literacy. Empower your loved ones with the weapon of financial knowledge, as it will help them to enhance their understanding of money management and stay financially secured for the long term. Financial literacy will help them survive in unfavourable conditions and to manage their finances in times of crisis.

You can gift them an enrolment to an online e-course that enhances their financial knowledge and makes them financially aware, this course must include features such as understanding nuances of financial planning, building an all-weather portfolio, etc. It will help your loved ones become their own financial planner and they may, in turn, inspire their family to make financial decision and become a financial guardian.

Therefore, this Diwali take a step forward and plan on these above-mentioned financial gifts for your loved ones to brighten their financial future. Bring in the light of financial security this Diwali; protect your loved ones with a sound financial future!

We wish Diwali brings you good health, wealth, success, and prosperity leading to a financially blissful life ahead.

Happy Diwali!

PS: PersonalFN understands that not everyone holds adequate financial knowledge. We encourage you to gain and enhance your financial knowledge and become a 'Financial Guardian'. You should understand the financial planning elements to become your own financial planner and guide your family through these challenging times.

And if want to know how to become a financial guardian for your family, PersonalFN's latest special initiative, the "Certified Family Guardian" offers you an exclusive opportunity to learn the finer nuances of money management.

Organised into eight modules with 24 extensive videos, the "Certified Family Guardian" will help you with all the relevant tools and learning modules needed to get better at money management. It also offers a host of other benefits to help you make informed investment decisions. Read here for complete details.

So, if you wish to improve your financial knowledge for a bright financial future, enrol to "Certified Family Guardian" course today!

Warm Regards,
Mitali Dhoke
Jr. Research Analyst

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds