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  • Education years to equality  389

How to pick a Christmas gift that keeps on giving

Effie Zahos takes a look at the three gifts that will keep on giving this Christmas and they’ll make you feel good too!
Effie Zahos
December 15, 2021

The 2021 festive season looks set to bring a sleigh load of cheer to retailers, with Roy Morgan predicting Australians will spend around $58.8 billion this Christmas – an 11.3% jump on pre-pandemic spending.

It’s great news for businesses that’ve copped a tough year through lockdowns and border closures. And we all deserve to treat ourselves and our families.

But if this year is anything like Christmas 2020, a fair chunk of the gifts we buy will miss the mark. Last year, selling site Gumtree reported that one in two Australians received at least one unwanted gift. That’s $572 million spent on presents that were binned, regifted, re-sold or simply shunted to the back of a cupboard.  They’re the sort of gifts that when recipients say “You shouldn’t have”, they really mean it.

This festive season, why not take a different approach, and give a present that keeps giving long after the Christmas tree is packed away? Here are three ideas to get you started.

1. Skip the latest tech, buy the tech shares

It’s hard to imagine a festive season that doesn’t involve buying some IT gadgetry. But tech gifts can lose their value quickly, especially when updated models are released. Last year, a new iPhone 12 Pro would have set you back around $1,700. Today, the same phone is worth around $1,020 secondhand – a 40% drop in value in just 12 months.

It’s a different story when it comes to shares in some of the major tech companies. This time last year, Apple shares were worth around $US115. Today they are trading at $US160 – a jump of 39%.  Shares in Alphabet (the company that owns Google) were trading for $US1,793 a year ago. Today they are sitting at $US2,935 apiece – a 63% gain.

Of course, past returns are no guide for the future, but if you’re not sure which shares to buy, gifting units in an exchange traded fund with a tech focus, can make the choice easy.

2. Give the gift of education

A quality education can set kids up for life, and helping fund it all can be a wonderful gift from grandparents and other family members.

Small children have time on their side when it comes to making the most of compounding returns, and a portfolio comprised of exchange traded funds can be an easy way to achieve diversity with the potential for healthy long term gains.

Other options for family members to band together to save for a child’s education include investment bonds or simply drip-feeding funds into a diverse portfolio of shares held in trust for the youngster. If you’re not sure which option works for your tribe, a financial adviser can explain the pros and cons of each strategy for your situation.

Kick-start an education portfolio this Christmas, and it can become a family tradition to add to it over years. Building an education fund this way gives every family member a chance to be part of a child’s education.

3. Help to relieve financial stress

COVID-19 has dealt a heavy blow to many Australians. The latest Financial Comfort survey by ME Bank shows single parents, the self-employed, casual workers, and Gen Xers (aged 41-56) have been hardest hit by the pandemic.

This Christmas why not give someone you know a financial helping hand?  A Bill Fairies gift voucher can cost from $25 to $1,500, and the recipient can use it to pay household bills – anything from regular utility bills to education costs, plus home or car repairs.

Sure, some of the gift ideas I’ve looked at can be beyond the budget of one person. But by pooling resources, families have an opportunity to give presents that show warmth and care, while also playing a valuable role in boosting a loved one’s financial future.

Effie Zahos is an independent Director of InvestSMART, money commentator at Canstar.com.au and Channel 9 Today Show.
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Effie Zahos
December 15, 2021
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