BOITUMELO NTSOKO: It’s almost Christmas, and if you haven’t found the perfect gifts for your loved ones, then stay tuned. Tanya Joubert, who is a certified financial planner at PSG Wealth Pretoria East, joins us on this episode to share some ideas of last-minute financial gifts that your loved ones will appreciate. Welcome, Tanya.
TANYA JOUBERT: Thanks for having me on your show, Tumi.
BOITUMELO NTSOKO: Tanya, could you maybe give us some ideas on what to give those who have just become parents?
TANYA JOUBERT: I think we can all agree that new parents experience significant strain on all sorts of resources. The two that come to mind are financial pressure, which in all honesty I think most people are experiencing at the moment, regardless of children, and the second one is time constraints. So gifts that can alleviate these pressures will always be welcome.
Often parents or grandparents have the specific intention of investing a specified amount in an investment to benefit a child in the long term. This financial boost can make a huge difference in the long term, but it’s important to consider that this gift entails a bit of paperwork and there are some technical implications to consider. So it might be a good idea to chat to a financial advisor and perhaps even a tax practitioner who can maybe help navigate those waters.
For more immediate or short-term gift ideas the options are almost endless. Of course, obvious gifts like diapers are always helpful, or home-cooked meals for the freezer, but there are many other options to consider that might not come to mind immediately. These can range from relatively small contributions to more substantial ones. A gift voucher is always a handy gift idea, and some people might feel that is slightly more personal than just a gift in cash.
Vouchers can also be used for online purchases, saving both time and money. Almost all retailers offer vouchers allowing the new parents to purchase items that they might need, but an Uber voucher I find is always handy. Consider someone who might not have their own transport and, for example, require medical attention for the baby.
A voucher idea for a grocery store might also go a long way in alleviating the general financial strains on the whole household.
Another voucher idea is for a household-cleaning service or a gardening service like SweepSouth. Getting around to prioritising everyday household duties can prove to be quite challenging for new parents.
And of course, passing on previously loved baby clothes and toys will benefit all parties involved.
Alternatively, one of my favourites is being creative with some homemade [free] voucher ideas for specific experiences like a free babysitting session. That’s a fun and affordable way of showing love to the new parents.
When you think about it, the reality is that many people become quite anxious at this time of year, thinking of the various financial implications relating to the festive season. Not all gifts need to cost an arm and a leg, and it really is possible to experience the festive cheer without all the stress.
BOITUMELO NTSOKO: And what could you consider giving primary and high school children that could help them build financial knowledge or start them on their financial journey?
TANYA JOUBERT: Such an important question, Tumi. Financial education is a topic that in my view isn’t sufficiently addressed in the formal school curriculum at all. You know what they say – ‘it takes a village to raise a child’. Well, unfortunately, it ultimately comes down to this village to teach the youth financial literacy, assisting children in gaining knowledge and becoming financially literate, or equipping them to get a head start one day in their own financial planning and independence.
Ideas to consider here could include financial magazine or newspaper subscriptions, something that will offer access to podcasts and audiobooks like Audible or Spotify. These are gifts that will end up keeping the children happy long into the future.
And then let’s not underestimate the importance of a good old piggy bank in teaching the little ones to save, or a board game like Monopoly which teaches money matters in a fun and interactive way.
BOITUMELO NTSOKO: And for those who have just graduated and are about to start their careers in the new year, what would be the ideal present for them?
TANYA JOUBERT: Generally speaking, most of these youngsters [will] earn an entry-level salary, which often needs to be stretched quite far. This is the time to build your financial foundation and, by the end of the month, when you’re done with all the financial commitments, there might not be anything left to spend on yourself or to enjoy. I feel most of the gifts that I’ve mentioned so far can help here too – Uber vouchers, grocery vouchers, audiobook subscriptions – but also things like dinner vouchers, movie tickets, clothing vouchers. I think the theme here should be helping these guys [to] not spend their own money, so that they can focus on finding their feet with their own financial planning.
BOITUMELO NTSOKO: Now we know that startup entrepreneurs need a lot of resources to get their businesses going. What could you give them to help them out?
TANYA JOUBERT: Most business ventures take some time before they become profitable. So I think if there is anything you can do for these entrepreneurs that might assist them during the stressful time, you should do it. It might sound boring, since there’s no wrapping involved, but if you have a particular skill set that you can offer this can be a fantastic gift. As an example, if you’re a photographer or a web developer, assisting the entrepreneur to get his website up and running will prove to be extremely valuable. Sometimes entrepreneurs are the dreamers, and a little help on some of the more practical or business issues will probably go a long way and help them in that initial startup phase.
These are just a few examples, but being willing to give your time to someone is often the most precious gift that you can give.
Alternatively, you can always help them upskill themselves by perhaps gifting them an online course. There are many online courses available out there these days. A basic accounting or finance course, or a topic that will assist them in managing their social media presence, even a basic Excel course, is probably also a good idea and quite handy.
And then they might also experience challenges from a transport point of view. If you have to go and see a client and you don’t have your own transport, an Uber voucher can again come in handy. Or perhaps airtime or data bundles, which will allow them to keep the wheels of the business turning going forward.
BOITUMELO NTSOKO: And what would make the ideal gift for grandparents?
TANYA JOUBERT: I’ve found that many retirees really strive to simplify their lives by scaling down and decluttering. They’ve reached a point in their lives where accumulating things is no longer a priority.
So gifting experiences, rather than things, might be a better option to consider for these guys – or gifting them certain consumer goods like favourite skincare products so that they don’t need to incur the expense themselves. That can also prove to be quite handy.
Then just remember of course with the ageing process come certain specific needs. Often resources are quite limited, making it a challenge to meet these needs. Physically speaking, it might not be easy for them to fulfil their normal household tasks like cleaning or mowing the lawn. Once again, I think a voucher for a cleaning service or gardening service like SweepSouth will come in very handy. Many grandparents find reading books to be a lot more challenging than it used to be in the past. Once again, a subscription for audiobooks like Audible might fill this gap. Subscriptions to streaming services can also be great gifts. Our grandparents really have earned the right to relax on the couch for a little longer than usual.
And then, again, gifting your time is probably the best gift for grandparents. I found grandparents attach great value to their grandkids or children helping out with, for example, tech-related issues like setting up email on their cell phones, or even online banking and getting the online banking app going. The bonus of gifting your time is that of course it doesn’t cost you a cent, and the value-add in doing this is priceless.
BOITUMELO NTSOKO: And what are some of the factors you need to keep in mind when giving these financial gifts? For instance, are there any tax implications for you?
TANYA JOUBERT: This is such an important question, Tumi. There are many technical issues which might be difficult to navigate without the help or guidance of a financial advisor or wealth manager, but let’s just look at a few basic ones.
I think the most important consideration that comes to mind is donations tax. Each individual is permitted to gift or donate only R100 000 per tax year. Donations that exceed this amount are taxed at 20%. Then another catch with this is that you can’t wait for the end of the tax year to pay it over to Sars. Donation taxes are due by the end of the month following the month that the donation is made.
There are, though, a few exclusions that can apply, like donations between spouses which don’t attract donations tax. But it’s always a good idea to consult with a tax specialist before exceeding the R100 000 limit. They might be able to help you with the technicalities and advise you in terms of structuring the donation.
Another important consideration comes in when investments are made by parents or grandparents in the name of a minor. It’s important to understand that while the child is a minor the parents or legal guardians are usually the individuals who have authority to act. But as soon as that child turns 18 [he or she gains] full control of this investment. Another implication of an investment in the name of a minor is the fact that it does not form part of the parent’s estate, but rather the child’s own estate.
Also just keep in mind that most financial institutions will insist on paying out the funds – when [the funds] reach the point of withdrawal – only to a bank account in the name of the investor, who in this case is the child.
BOITUMELO NTSOKO: Thank you so much, Tanya. That was Tanya Joubert, who is a certified financial planner at PSG Wealth Pretoria East.