All things gifting: how much, too much, and throwing a lesson in there too!

• You can do so much with a gift, and with a little bit of thought. And those are the feelings that we want to be giving our children obviously. (03:56)
• Currently in 2021 you're allowed to gift up to $15,000 per person to any other person. (04:08)
• Think about what gifting goals you may have for your kids, but more importantly, what lessons you can help in teaching them through that gifting. (09:59)

Quote for the episode. "Get them interested in making positive money steps when they're young and that mindset will carry them exponentially farther in all likelihood than just those kind of few dollars that you spent in the process." (10:17)

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Welcome to the EnjoyMore30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out, and distract our focus

from simply enjoying life.

Welcome once again to the EnjoyMore30s Family

Finance podcast. Here we're aiming to help you take those

steps forward, gain that confidence, and therefore remove

that financial anxiety so you can focus solely on making your

life more enjoyable, because that's really why we're all here

just to make life more enjoyable. And this series we've

focused specifically on the kids. So this series Your Kids

Money Mindset series, we're focusing on you, your kids, and

try to help when it comes to them. And you know, we all love

giving to our kids. So today we're going to talk about giving

to our kids, and how you can do that best.

So as always, if you like what you're hearing, please make sure

to subscribe or follow us on Apple podcast, or really

wherever you listen. Clicking that star, leaving the review,

it really really helps us reach the literally millions of other

young families out there that are just like you. Last week, we

discussed what is probably going to be the most important episode

of this entire series, which touched on how you are

essentially fully responsible for what future money mindset

your children may have, whether that's good, bad or otherwise.

So school is really not going to teach them anything at all, at

least from what I have seen. Either they're gonna form their

own money based opinions on what friends tell them, on what music

videos they like, or you can proactively influence that. But

either way, some money mindset is going to be formed. So if you

haven't checked out that episode yet, definitely do that soon.

Today's episode, though, is titled, What a Nice Gift, where

we're going to cover all things when it comes to gifting from

how much you can gift, to what happens if you go over that

limit, to interesting ways to consider making the most of that

gifting of money that you want to do for your kids. So really,

the goal for today's episode, if you walk away with this is I

want you to think about what you may want to do in the form of

gifts to make a lasting positive impression that children will

benefit from, of course, but also remember and help in

positively shaping their money mindset for the rest of their

lives. Now, I'm guessing that you are the same as me, where

you still remember the best gifts that you ever gave anybody

in your life, that look that you see on somebody else's face,

that you know the the emotion, it just sticks with you when you

get the gift that's just right, you almost get more than they do

just from the reaction. It feels just so fantastic that you were

able to give them something that could mean that much to them. As

an example, one time for Bob's wife, Savia, Bob and Savia are

the founders of the firm, who, Savia's father was an inventor

by trade. And he has long since passed. But he had all of these

original blueprints. So I got a copy of one and blew it up and

made it a framed copy of it that you could hang up in her office.

And just the look that she had, the feeling that she had, you

know, this was her father, this is what her father dedicated

just 10s of years to what they still work on today was just so

so awesome.

Another time in a completely different direction. When my

sister passed away the local church without us knowing or

asking, they reached out to the funeral home, and they made

prayer blankets for all of my family members in memory of my

of my sister. So you know, it's not something I was expecting at

all. But if if my house was on fire, that would be one of the

things I would want to grab now. So the point of all this is you

can do so much with a gift, and with a little bit of thought.

And those are the feelings that we want to be giving our

children obviously.

So you know, the first question is, you know, how much can you

actually gift? Currently in 2021 you're allowed to gift up to

$15,000 per person to any other person. So I can gift $15,000 to

each of my children. My wife could also gift $15,000 to each

of our children. So we could cumulatively gift $30,000 if

that's what we were wanting to. I could give $15,000 to you if I

really wanted to. Now if you're listening to this podcast,

you're likely younger with younger kids. And I'd imagine

you're originally saying by this "Joe, you know, I'm not handing

over $15,000 to my kids right now. Maybe way, way, way down

the line depending on how things go. How much you helped me, Joe,

but not today." And you know that that's totally fair. I'm

not handing over any money to my kids in the form of a $15,000

check either. How I do plan on helping them though with

college, I would love to help them get on the right path when

it comes to saving to their futures. So, you know, for

college if you do decide to use a 529 plan to any degree, and if

you remember, this is the school specific savings vehicle, which

was covered in much, much more detail in 5.2 of the series, you

can lump sum up to five years worth of the gifting limit all

in one year. So for me, personally, I could give my kid

$75,000 into a 529 plan all in one shot. Now, if you're going

to use funds to pay for college anyway, you know, why not have

them grow tax free. The strategy that I that I like even better

though, to discuss here, when it comes to gifting, because a 529

plan what we're giving to them for college, that we're doing

that obviously to try to help them but there's not much

learning that's built into that.

If you do have kids that are old enough, though, to have their

first job, here's where you have the opportunity to tie learning

in with gifting. So you can match or think about matching

their earnings or their savings that they're making at work into

another account, a Roth IRA or another investment.

Simultaneously now, you're teaching them many different

things. So let's say every $100 you make, I'll put in $50 into

an account for you. Or every $100 that you save of what you

make, I'll put in $50 into an account for you $100, and

they'll match at 100%, whatever it might be. Now you're teaching

them about working hard, one, about saving for the future,

two, compound interest, three, when you explain what I'm about

to go through and even getting them used to the idea of

matching. Matching is what they're going to encounter if

they have a work plan, a 401k or anything like that. Get them

used to the idea, you know, "see Johnny, you just made 100% on

your contribution. You put in $100 into this account, I put in

another $100. You just made 100%. And now that $2,500 let's

say that now we've built up in this aggressive Roth mutual

fund, maybe worth let's say, $100,000, by the time you look

to retire." So you know, these are lessons that many people

don't learn until much later, or sometimes not at all. So it's

super, super important, super impactful, where you can now

start using these gifts, not to just help them accomplish

something but to help teach them something, help them learn

something that could last with them for the rest of their

lives.

And don't forget how this may come into play for your parents

as well. As we've talked about before, I understand if you and

your parents don't exactly talk about money, because many don't.

As we talked about at length in series three, Your Parents Money

Mindset, it's this taboo subject. But if they are in a

good position right now financially, maybe they have

extra fixed income, or your advisor has shown them that they

are well over what they need with projections to not run out

of money. Then these are things that they can participate in as

well if they want to. Grandparents like helping their

grandchildren out in different ways. I've had multiple clients

walk through my office with investments that grandma or

grandpa set up for them and they really, really valued that

contribution and that connection. This is grandma's

money. This is grandpa's money that he set aside specifically

for me. That resonates. They want to duplicate that. They

want to replicate that down the road. And again, I'm obviously

not trying to have you hit up mom or dad for money by any

means. They worked hard for their money and first and

foremost, I'd like for them to spend it on themselves. But many

of them are just going to have more than they may need. Many

may want to have something to leave to kids. If asked do you

want to leave a bunch of money in your pockets for your kids to

get when you die? Or would you rather see them enjoy it while

you're still living? And I've yet to hear anybody I've dealt

with say "I would rather than get a bunch of money when I

die." Now maybe that's just my experience, but so far have not

heard that as an answer.

Now while there is technically a limit to this, it is somewhat

less relevant for many people. The current lifetime exclusion

for 2021 is $11.7 million. Meaning if you do go over that

$15,000 annual limit, you will have to file a gift tax return

and your $11.7 million dollar exemption will lower by the

excess. So as you see for middle class families, maybe not

exactly a real concern from a practical standpoint, let's say

more times than not. Whether you have an $11.7 million exemption

or a $11.680 million exemption, you're probably still going to

make out okay in that regard.

So from today's episode, I'm really hoping that you're

walking away with that goal that was set early on in the episode;

leaving with the desire to think about what gifting goals you may

have for your kids, but more importantly, what lessons you

can help in teaching them through that gifting. So what

money concepts do you want to teach them, because gifting can

likely help. And remember to talk to your kids about these

items. Get them interested in making positive money steps when

they're young and that mindset will carry them exponentially

farther in all likelihood than just those kind of few dollars

that you spent in the process.

Thanks very much for tuning in today and join us for next

week's episode called Your Kid Almost Certainly Doesn't Need

Savings Through a Life Insurance Policy, where we are going to

cover what has often become known as the Gerber policies.

You may have had one of these given to you by your parents,

and really dig into why in my opinion, you don't want to be

saving for your young child through life insurance.

Overall, as I always say, if you're able to implement what we

covered today, then that's just fantastic. You have less to

worry about than before, you can focus more on enjoying life.

That's why I'm putting all this content out there. So start

thinking about this gifting from today's episode, how you may

want to use it to create lessons for your kids to learn.

If you are wanting help with any of these things though, or have

questions that you need help in clarifying, check out the Ask

Joe section on the show's website www.EnjoyMore30s.com.

That's EnjoyMore30s.com and until next week, thanks for

joining me today and I look forward to connecting with you

again soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax, or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities, Inc., and TFS Advisory Services an SEC

registered Investment Advisor member FINRA/SIPC.