The gift that keeps on giving

December 15, 2020

Youssef Darwich

The Bank of England estimates that a typical UK family will spend, on average, an extra £800 in December. That's not overly surprising when the average parent spent £129 on each child for Christmas in 2019 and the average grandparent spent a further £81.

Gifting - an alternative approach

We're all for giving gifts to our children but when almost one in five unwanted gifts end up in landfill it makes you think about whether as a nation we're giving our children the right gifts and teaching them the right things.

As parents ourselves, we get it... The reaction our children have to a new present is priceless so we'll always try to hold on to that genuine joy as memories often mean more than money. But what if we take baby steps and start by spending 25% less on each child and ask grandparents to do the same? Instead, we invest that amount in a way that could give our children the chance to enjoy a decent pot of money at the age of 18. Although any investment carries a risk, it's likely to be much lower than the certainty of wasting money on toys.

Let's break this down for you...

If you reduce those numbers by a quarter, your child would still get many presents but also enjoy a yearly investment of roughly £72 (£32 from the parents and £20 from each set of grandparents).

Now let's take a look at how that £72 can grow if it's invested each year (from birth to 18) and grows at 5% (remember this isn't guaranteed and when you invest the value of your investments can go down as well as up).

The above illustration assumes a 5% growth rate. This performance is not guaranteed and with all investments, the value of your investment can go down as well as up.

By the age of 18, those £72 each year could have grown to nearly £2,150! 👌💥

And that's just taking into account a small reduction of Christmas gifting, so imagine if you did the same for other holidays and birthdays!

Just think of the look on their faces when you hand them that as a present at 18 instead of yet another nicely wrapped Christmas pyjama and socks set. Also, it's almost guaranteed they won't really put much value on all the Peppa Pig, PJ Masks, Soap and Glory or Lynx gift pack sets and whatever else you bought them through their life at Christmas.

What if we told you that spending less on gifts is the gift that keeps on giving?

The advantages aren't just financial. A reduction in cards, wrapping paper and presents is much needed by the environment. According to recent figures, "it is estimated that 125,000 tonnes of plastic packaging are generated at Christmas time, with advent calendar trays and plastic packaging for toys being the worst culprits". Add to that the ONE BILLION Christmas cards we buy each year and the 160 million rolls of wrapping paper used and thrown away, much of it going to general waste if it has foil or glitter.  🤯

Do we really need to go this far into creating a fairytale Christmas? Surely it's more important that our children's future isn't affected negatively by our current indulgence.

So where do you start?

  1. Be the face of change and reduce the overall spending on presents for your children by at least a quarter
  2. Save the surplus money and prepare to generate a substantial money pot instead by when they're 18
  3. Ask your family and friends to contribute to your children's money pot by decreasing the amount they spend on physical presents
  4. Speak to your inner circle and offer to give their children money and a smaller present, instead of spending the full amount on toys, etc.
  5. Enjoy some eggnog and mince pie feeling great about making good choices 😇

What happens next?

We are very close to launching our product so simply join our waiting list by clicking the orange button below and get ready to deposit the funds when we start rolling out access early next year. As you're on Santa's nice list for saving money and cutting down on waste, we'll also give you 12 months free of premium tier access if you join our waiting list before the 15th of January, 2021.

Wonder what a nice Christmas money pot would have looked like today? Check out our #powerofinvestment series on Twitter or Instagram to see how much some of the presents you were gifted growing up could be worth today if your own parents had invested that money instead.

Hapi Holidays! 🎄

Disclaimer:

All writers' opinions are their own and should not be read as personal financial advice.  Individual investors should make their own decisions or seek independent advice. As with any investment, your capital is at risk and may be going up as well as down which means you may be left with less than your initial investment.

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