Realistic Gifts for Children and Grandchildren

Over the years, many of us have grown accustomed to being quite generous with our adult children and grandchildren. In addition, our children and grandchildren may have grown accustomed to receiving large gifts from us.  This can cause problems as we age and our budget can no longer permit us to be so generous.

What can you do to make sure that you do not destroy your own retirement plans by spending too lavishly on members of your family?

Talk to Your Adult Children

Even before you retire, there is nothing wrong with casually saying to your children, "I'm glad I am able to buy you this expensive gift now, while I'm still working, because I won't be able to afford to do these things once I retire."  This prepares your children so that, when the time comes, they are not shocked when they expect one thing and receive something else.

Set Up a Realistic Budget

It goes without saying that some retirees are able to afford to give more to their adult children than others.  Whether you can afford to spend $5, $50, or $500 a person, make sure you have set up a realistic budget that will not disrupt your income.  You do not want to be spending down your savings or investment principle in order to purchase gifts for your children.

The Best Gift You Can Give Your Children is to be Self-Supporting

Do you really want your children to have to support you in the coming years ... possibly at the same time they are trying to put their own children through college?  Do you want to have to move in with your children for financial reasons?

In addition, most young and middle aged adults would experience a great deal of financial difficulty themselves if they were called upon to help support their parents.  Consequently, you are doing your children a favor when you do not overspend on them for holidays and birthdays.

Sometimes Large Cash Gifts Can Be Part of Your Estate Planning

On the other hand, sometimes giving large gifts of cash, stock or property can be part of your estate planning.  If your estate planner recommends it, making large gifts to your children while you are still alive is one way to reduce inheritance taxes on large estates.  However, only do this after consulting with your estate planner and you have determined that you will continue to have an income stream that will support you for the rest of your life.

Make Sure You Keep Things Fair

When you reach the point when you have to decrease the size of the gifts you give to your children and grandchildren, be careful to keep things fair.  If you pay for an expensive trip for one grandchild, for example, but have no intention of doing the same thing in the future for others, it will only cause resentments and unhappiness.  Make sure that you are as even-handed as possible.  This is especially important in a blended family in which the husband and wife may have children from other marriages.

Decide Whether You Want to Give Gifts, Cash or Something Else

Some people I know give several hundred dollars at Christmas to each of their adult children, and they let them divide up the money between themselves and their children as they see fit.  Other people give individual gifts to their children and grandchildren, but no cash.  Another choice is to give gifts to one generation and cash to another ... for example, gifts to your children and cash to the grandchildren (or the opposite).   I have also known people who just buy gift certificates or write checks to everyone in the family.

One year, my husband and I decided to buy Disney stock for each of our grandchildren.  We thought it would be good for them to have an interest in the stock market and it would help a little with their future college costs.

However you decide to handle gift giving is up to you and should be based on your own financial situation, as well as what is easiest and most enjoyable for you.  After all, since you are making the gift, you have the right to decide how you want to handle things.  Just make sure you remember to take care of yourself, too.

Happy Holidays from my family to yours!

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Gift Giving Ideas on a Fixed Income

Fashion Island Mall in Newport Beach
(photo by public-domain-photos.com)

It is not too soon to start thinking about your holiday shopping ... especially if you are on a fixed income.  As the holidays approach, one concern that many retirees have is how they are going to handle holiday gift shopping.  This is one of those extra expenses that is often left off the retirement budget you originally planned.  Before you retire, you need to decide how you are going to pay for all those little extras that can add up to a lot of money.

In our family, we have four grown daughters, three son-in-laws, and seven grandchildren, and we like to purchase gifts for all of them. We have also always bought gifts for my parents, who are still alive, as well as my sister and her family, and assorted other friends and relatives. However, we do not earn nearly as much money as we used to.  There was a time when I could go to the Fashion Island Mall in Newport Beach (pictured here), and purchase a nice gift for everyone on my list.  Today, however, that is not as realistic.  The older we get, the more difficult that is likely to become.

I recently read a darling article about purchasing small or fun items and tucking gift cards into them.  Among the suggestions the author made were putting gift cards in underwear, and coffee mugs!  I don't think I'll buy underwear for anyone on my list, but I do like the idea of buying small gifts and inserting a gift card into each one.  For example, all our daughters and granddaughters have pierced ears and they all like silver earrings.  I'm watching for a good sale on silver earrings.  If I can purchase earrings for all the girls on my list, it will greatly simplify my holiday shopping.  I'm still exploring what small gift I can get for the guys.  Funny coffee mugs might be an excellent idea.

For the three youngest grandchildren, I will continue to purchase them toys, and perhaps give them a little cash to go along with their gifts.  My parents have asked that we no longer send them gifts because they already have everything they need.  However, I know they love chocolate, so I'll certainly send them a nice box of candy.  My sister and I have agreed to stop exchanging gifts this year, which is a relief to both of us.

Giving homemade cookies or nut breads is something simple I can do for many of my friends.  I may make my life even easier by picking up some cute, decorated cookies at the store and giving them to friends.

The bottom line is that now is the time in our lives when we need to start saving money on holiday shopping.  The expense has become so large, that I can no longer handle all the purchases we made in the past.  It is almost a relief to begin to cut back on the big holidays we used to have!


If you have some ideas on how you are going to save money on holiday gifts this year, feel free to pass on your suggestions in the comments section.  Who knows how many other people you could help with your ideas!

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