Be Your Family’s Secret Santa and Gift a Secure Financial Future

So, if you are looking to take it a level up this Christmas season, put on that red suit, literally or metaphorically, and be your family's Secret Santa. Opt for unique thoughtful gifts that would provide financial security and which will be deeply appreciate instead of the usual stocking stuffers.

Considering the challenges of 2020, we have listed a few innovative Secret Santa gifts that will benefit your family and strengthen their financial future:

1. Prudent investments in Mutual funds - In today's environment where economic uncertainties and inflation is eroding the purchasing power of our hard-earned money, it is important for you to make productive investments that will potentially clock better inflation-adjusted returns (also known as the real rate of return), are tax-efficient, and enhance the journey of wealth-creation.

   Mutual funds are one potent investment avenue that could enable multiplying wealth and counter inflation over a longer period. 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.

   Investing in mutual funds facilitates diversification (which is one of the basic tenets of investing) are professionally managed (by qualified and experienced fund management team), the minimum investment required is low, offer the economies of scale, and are liquid.

   Besides to regularly and systematically invest (daily, monthly, or quarterly), there are Systematic Investment Plans (SIPs), which is a rewarding strategy in itself and an effective medium of goal planning.

   The long-term financial goals like children's education, their wedding expenses, buying a dream home, a lavish car, etc. can be achieved with the help of SIP or Systematic Investment Plan.

    

   You see, education is getting more expensive with time and ensuring quality education should be the top priority for all parents.

   To plan for the financial goals of your family, choose mutual fund schemes carefully paying heed to personal risk profile, investment objectives, the financial goals you wish to address, and the time horizon before the financial goals befall. Also, choose the scheme/s sensibly paying attention to a host of quantitative and qualitative parameters.

   Download and read PersonalFN's Free Guide: 10 Steps to Select Winning Mutual Funds.

2. Create an emergency fund - As many of us have witnessed the unprecedented events this year, 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.

   An emergency or rainy day fund as a gift to your family could save you from the setback. Therefore, hold at least 12 to 24 months of regular monthly expenses, including EMI on loans, in a separate savings account or liquid fund as a contingency reserve. While saving and investing money wisely should be your top priority, putting aside some cash-and-cash equivalents for emergencies is also necessary.

3. Gift Gold - Gold is symbolic of Goddess Lakshmi, a mark of wealth; it is highly liquid, acts as a shield against inflation, a safe haven in times of economic uncertainties, and an effective portfolio diversifier. Gifting this precious yellow metal will serve as a store of immense value for your loved ones would be deeply appreciated.

   In India (the world's second-largest consumer of gold), gifting gold is part of its culture and rituals. Plus, gold can be passed on through the generations, strengthening family bonds. However, along with physical gold also consider the smart option of a Gold ETF and/or a Gold saving fund, which may serve as a portfolio diversifier.

   Investing in Gold ETF and/or a Gold saving fund offers:

   • Convenience to invest in gold at prevailing market price without any premiums involved as in case while buying physical gold.

   • You don't need to worry about storage, security and quality

   • Ensures high liquidity, as it can be sold at prevailing market price without probing the quality in the time of need.

   Do note that over the long-term, gold as an asset class has exhibited an uptrend and performed reasonably well highlighting the importance of owning gold as an investment option.

4. Buying an optimal insurance cover - As the breadwinner of your family, safeguarding their financial future is your responsibility. Their financial wellbeing should not be jeopardised in your absence. So, make sure you have an optimal life insurance coverage. Your life insurance coverage should be able to handle outstanding liabilities (if any), plus be able to address certain financial goals of your loved ones in your absence.

   Likewise, with healthcare costs on the rise, you cannot ignore the importance of holding an adequate health insurance cover.

   Insurance is for indemnification of risk and protects dependents from a financial loss in the case of an unfortunate event. Therefore, hold an optimal insurance cover for both, life and health.

5. Worry-free retirement for your spouse - This Christmas gift your spouse the security that would ensure that your golden years are blissful. Evaluate your current income, risk appetite, years to retirement, your post-retirement expenses, recreation costs and consider inflation, to plan for your retirement wisely and choose appropriate investment avenues for the same.

   The early you start your retirement planning, it will give you the chance to build a substantial corpus that could sustain you in the golden years of your life.

6. Gift financial board games to kids - It is necessary to teach the nuances of prudent money management to children at an early age. This would make them understand the value of hard-earned money and not assume it grows on trees.

   Introduce children to a few board games associated with money such as Monopoly, Game of Life (similar to monopoly), Cash flow (inspired by Robert Kiyosaki's Rich Dad, Poor Dad teaches how to be in better control of your finances), Payday (teaches how to manage monthly budgets), etc.

   When your child grows up, they would appreciate the lessons and the values you have imparted. It is important to consciously impart the right financial education to children at the right age in this fast-growing world. This could be one of the unique Christmas gifts you can give your children.

You see, financial education plays a vital role in everyone's life, it equips your financial awareness to utilise your hard-earned money effectively and make informed financial decisions that can improve your financial health.

Therefore this Christmas, gift your family a 'Financial Guardian' who understands the financial nuances, holds prudent money management skills, and achieves financial objectives.

And in case you are wondering how you can become that financial guardian for your family, you need to equip yourself with the weapon of financial knowledge in the interest of your family's financial wellbeing.

PersonalFN's latest special initiative, the "Certified Family Guardian", offers you an exclusive opportunity to learn from 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 and making informed financial decisions for your family's secure future.

It also offers a host of other benefits to help you make informed investment decisions. Read here for complete details.

Do you wish to gift your family a 'Financial guardian' as a unique Christmas present and secure their financial future? Then what are you waiting for! Enrol for "Certified Family Guardian" course today!

Merry Christmas!

Warm Regards,
Mitali Dhoke
Content Writer

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