Planning Now for Gifting Later

There are many situations in which gifting to family members can be beneficial, such as for estate planning purposes or for the satisfaction of helping children reach mile stones in life. However, it is important to have a firm financial foundation before making large gifts to family members. Here are five tips for creating a solid financial situation that allows for the financial flexibility to gift when the occasion and inclination arises.

1. Make paying off or paying down credit card balances a priority when unexpected funds come in
2. Consider if refinancing a home mortgage would be beneficial
3. Create a savings account that is for unexpected expenses, like helping out family members, rather than only savings that are already designated to planned future expenses
4. Start a retirement account and planning early to have more time to build the savings
5. Create a health care plan by saving now for future medical needs

See Peter Bennett, Before Giving Money to Family, Make These 5 Critical Steps, My Bank Tracker, Sept. 28, 2014.