Gift giving: where do you draw the line?

[Trudie]

I have some specific challenges with gift-giving, and am wondering what others do to "draw the line."  (It's that time of year.)

Some specific scenarios/questions:

1- College funds:  I have two nephews, one of which is in his junior year of college.  A few years ago I started 529 accounts for them and have been dropping in small amounts each year (instead of buying gift cards and crap).  The balance isn't huge ($750 or so) and seems like a drop in the bucket.  However, now that they are over 21 I'm asking myself when the gifts should stop?  My DH and I are within 5 years of FIRE and these are kids who've had significant (HUGE) 529 gifts from grandparents and even inherited a couple thou here and there from a great-grandparent.  My intuition is to just stop now and continue to focus on ourselves.  My sister has also intimated in the past that if the kids didn't use them they might be used for future family.  I said, "No.  I want them to liquidate the account in their senior year of college.  It was my intent that they use this money -- not future wives or children."

2 - Housewarming gifts:  Two weeks ago we were invited (on a Thursday to a Saturday gathering) to a housewarming for some neighbors who moved away.  There were just 8 of us there, and because of the late invite I didn't have an opportunity to coordinate much.  Here's what I took:  (1)  A huge double bottle of wine; (2) A big bowl of pasta salad I'd made (We changed other plans -- for which I had made the pasta -- to go to the housewarming.  I asked the host if I could contribute it before I just lugged it over to their house.)  Other friends brought store-bought gifts, then suggested we could go in on the gifts they brought.  I didn't feel this was necessary and dropped it.

3 - Gifts for grown siblings:  My inkling at this point is to just not.  Although it usually turns out that we just get tickets to games of our favorite teams.  They pay for our tickets, then we pay for ours... so it's an even exchange.  Not bad.

4 - Gifts for older parents:  Not into this anymore.  They're trying to get rid of "stuff."  I'm trying something new this fall -- taking a day off work to go down and visit, go on a long bike ride with them, then will cook for them all weekend.

I don't want to be stingy and cranky, but then again, there's nobody to save for my FIRE but me.  Your thoughts?  What do you do?

[MicroSpice]

We are trying to lean toward gift-giving only for children under the age of 12 - at least for Christmas. Birthdays for children we are close to are another matter, but we never spend lavishly.

I think your housewarming (or housecooling?) gift was fine. No need to justify what you gave. Consumables are almost never a bad idea.

For adults, I too am in the "less stuff" camp. So if we give a gift it might be a gift certificate to a favorite restaurant, movie tickets, concert tickets, spa treatment, etc. Just depends on the person and what their needs/interests are.

On the college funds question, I think you have to let that go. Yes, you intended the money to be used for your nephews' college expenses, but you can't really dictate what happens with a gift once you give it. Are you going to demand that you get the money back if it's not used for college expenses? Is that a fight you really want to start or have? With family?

[Bob W]

Put me down with the experience consumable,  homemade crowd.   I find photos in either small albums or frames are good.   Tickets are good.  Restaurants gift cards are good.   Booze always works in my fam. 

We started drawing names at xmas last year (or was it the year before?)   That worked out nice.  For the big family gettogether (40 peeps)  we do a guys and gals white elephant (I think it is called that?)   It is pretty fun.   Crappy gifts passed around and no one is upset. 

[charis]

My sister has also intimated in the past that if the kids didn't use them they might be used for future family.  I said, "No.  I want them to liquidate the account in their senior year of college.  It was my intent that they use this money -- not future wives or children."

This is the only thing that sounds stingy and cranky to me.  If the money was for them to use, why can't they use some it for the education of their future wives or children.  I can't even fathom, for financial and familial reasons, why you (I don't believe they can as beneficiaries) would rather liquidate the account than allow them to further the education of their families.   Your sister has no control over the accounts so that's neither here nor there.

[AZDude]

For parents and grown siblings, for any birthdays the most they get is just me paying for their meal if we go out. Seriously, 30+ year olds dont need birthday gifts. For Christmas I usually get everyone something small, probably $20 or less, except for my own child and wife.

A housewarming gift seems odd to me... Especially for someone who moved from one house to another. Why is a gift even necessary? I would be much happier if you brought some good food rather than some crappy widget from Sears.

I will agree with jez on the college fund. Once you give the money, it is theirs. It was a gift, they can use it however they want, within the law. I'm not even sure why you would care. Very curmudgeonly.

[Trudie]

My sister has also intimated in the past that if the kids didn't use them they might be used for future family.  I said, "No.  I want them to liquidate the account in their senior year of college.  It was my intent that they use this money -- not future wives or children."

This is the only thing that sounds stingy and cranky to me.  If the money was for them to use, why can't they use some it for the education of their future wives or children.  I can't even fathom, for financial and familial reasons, why you (I don't believe they can as beneficiaries) would rather liquidate the account than allow them to further the education of their families.   Your sister has no control over the accounts so that's neither here nor there.

Since it's a 529 it has to be used for qualified college expenses; it is not simply a regular account I set up for them to use as they wish.

Perhaps I do need to let go the question of "who" the funds are used for, but this is a tough call.  I set the funds up when the kids were minors and discussed it with their parents at that time, including how we'd like them to liquidate the funds to pay college bills their last year of college.  (The parents pay the college bills.)  And I've already had these discussions; so the most recent one just underpinned previous discussions.  My concern has to do with the fact that both kids are in serious relationships/headed to the altar with significant others who have much education (law school in one case; three years of undergrad in another).  In has to do with our original intent, which was communicated.  I guess I feel like I'm just asking my sibling to honor our intent.

[FrugalFan]

I struggle with this too. It is not only the cost, but also the stress of having to find all of these gifts at an already busy time of year. I also feel bad when I know someone who makes less money than us buys us something completely useless that will only take up extra space in our house. I feel so bad getting rid of it knowing they paid for it, but I don't need more "stuff". To me, it's gotten way out of control and it seems like a lot of people feel the same way but no one wants to do anything about it. We started with my family a couple of years ago with doing gifts only for the kids. We proposed it to my husband's family last week and his parents were not at all keen on the idea but his sister and husband wrote something in an email that made us think they would be open to the idea and it turns out they are! So I think we are finally moving in the right direction.

[AZDude]

My sister has also intimated in the past that if the kids didn't use them they might be used for future family.  I said, "No.  I want them to liquidate the account in their senior year of college.  It was my intent that they use this money -- not future wives or children."

This is the only thing that sounds stingy and cranky to me.  If the money was for them to use, why can't they use some it for the education of their future wives or children.  I can't even fathom, for financial and familial reasons, why you (I don't believe they can as beneficiaries) would rather liquidate the account than allow them to further the education of their families.   Your sister has no control over the accounts so that's neither here nor there.

It was a gift. Getting uppity over the specifics of how it is used is bad etiquette, at best. If you gave someone a coffee table, for example, but they did not need it, and so turned it into something else, like a doghouse or desk, would you be mad and insist that they only use it as a coffee table?

Since it's a 529 it has to be used for qualified college expenses; it is not simply a regular account I set up for them to use as they wish.

Perhaps I do need to let go the question of "who" the funds are used for, but this is a tough call.  I set the funds up when the kids were minors and discussed it with their parents at that time, including how we'd like them to liquidate the funds to pay college bills their last year of college.  (The parents pay the college bills.)  And I've already had these discussions; so the most recent one just underpinned previous discussions.  My concern has to do with the fact that both kids are in serious relationships/headed to the altar with significant others who have much education (law school in one case; three years of undergrad in another).  In has to do with our original intent, which was communicated.  I guess I feel like I'm just asking my sibling to honor our intent.

[Trudie]

We are trying to lean toward gift-giving only for children under the age of 12 - at least for Christmas. Birthdays for children we are close to are another matter, but we never spend lavishly.

I think your housewarming (or housecooling?) gift was fine. No need to justify what you gave. Consumables are almost never a bad idea.

For adults, I too am in the "less stuff" camp. So if we give a gift it might be a gift certificate to a favorite restaurant, movie tickets, concert tickets, spa treatment, etc. Just depends on the person and what their needs/interests are.

On the college funds question, I think you have to let that go. Yes, you intended the money to be used for your nephews' college expenses, but you can't really dictate what happens with a gift once you give it. Are you going to demand that you get the money back if it's not used for college expenses? Is that a fight you really want to start or have? With family?

Oh no - I wouldn't demand they give the money back, but I will demand that it be used for college expenses (since that's what a 529 is legally set up for).  I wouldn't go to the mat over it and I can let it go.  For one thing, it's not a huge sum and wouldn't be a life-changer anyway. At this point, though, I'm asking all kinds of questions about it -- including whether to continue to contribute, and so forth.  And I'm leaning no, given their ages and where they are with their educations.  It has been the pattern in our family (my parents/the grandparents) also set up educational accounts for the parents of the kids to request the draws, then pay the costs of their undergraduate education.

[charis]

My sister has also intimated in the past that if the kids didn't use them they might be used for future family.  I said, "No.  I want them to liquidate the account in their senior year of college.  It was my intent that they use this money -- not future wives or children."

This is the only thing that sounds stingy and cranky to me.  If the money was for them to use, why can't they use some it for the education of their future wives or children.  I can't even fathom, for financial and familial reasons, why you (I don't believe they can as beneficiaries) would rather liquidate the account than allow them to further the education of their families.   Your sister has no control over the accounts so that's neither here nor there.

Since it's a 529 it has to be used for qualified college expenses; it is not simply a regular account I set up for them to use as they wish.

Perhaps I do need to let go the question of "who" the funds are used for, but this is a tough call.  I set the funds up when the kids were minors and discussed it with their parents at that time, including how we'd like them to liquidate the funds to pay college bills their last year of college.  (The parents pay the college bills.)  And I've already had these discussions; so the most recent one just underpinned previous discussions.  My concern has to do with the fact that both kids are in serious relationships/headed to the altar with significant others who have much education (law school in one case; three years of undergrad in another).  In has to do with our original intent, which was communicated.  I guess I feel like I'm just asking my sibling to honor our intent.

I understand how a 529 account works.   It sounds like you are trying to force the beneficiaries to take money for expenses that they technically don't have because your sibling is paying the college bills.   You are trying to exert control over the situation in a way that is probably unreasonable for something that you state is a "gift."  Either it is a gift or it isn't.  I can understand your frustration with your sibling for changing the agreement, but if the 529 funds were not really intended to be a "gift," then that should have been decided a long time ago.

[pachnik]

Hi Trudie,
I like your idea of the gift of time for your parents.  this is what they need - not another widget.  I do the same with my parents but the gift is that we take them out for lunch.  Usually to try something different.  This year we are probably going to go out for dosas which from what I can figure out are South Asian savoury crepes stuffed with different kinds of curries.  I am quite looking forward to it.
I think your housewarming gift was fine.  A big bottle of wine is always appreciated!

[norabird]

I would stop paying into the 529s at this point since their age and the strife seems to make it a bad idea. I love getting gifts from my aunts and uncles but only actually expect/receive them from one pair (who get me clothes, housewares etc.). If they stopped I would survive. Could you take these kids out to lunch or something instead? Or get them a finance advice book?

I like to bring wine for a housewarming or food and don't usually bother with gifts unless I have something appropriate available. Depends on the friendship too!

My brother usually gets a tokenish gift because he's hard to buy for, and the SIL and I get each other nice things as part of our own friendship. That's really dependent on our relationship in each case and I think we could agree to go giftless--but I like the tradition. Very personal!

Food is a good non-stuff gift for parents and time is even better. I also try not to get them much because honestly they don't need it, but I like a small thoughtful gesture.

It's absolutely up to you and what you prefer in the end. I get some friends gifts too occasionally but not regularly. Baking usually works.

[kite]

We drew it much further back than you did. 
This is our philosophy:
Give time.  Give experiences.  Give money.  Or give something you made.  But once given, it's gone. 

We have over a dozen siblings between us, upwards of 2 dozen neices & nephews.  Financially and humanly impossible to keep up all gift-giving kinds of occasions and also be fair.  They won't all have confirmations, graduations and baby showers, for example.  Maybe I could only afford a $50 wedding gift when Sue got married, but can afford a $500 one now that Tony is getting married.  Say I can afford to give them each $100 for Christmas but I know Rose will put it towards college, but Paul will put it towards another gun.  It's a mess. 

A few careers ago, one of my colleagues mentioned how she hosted an annual restaurant brunch for her family at Christmas.  Whatever the price per person came to, it was less than what it would cost for her to buy a tangible gift, wrap, deliver, etc...  But the feedback she got was that everyone enjoyed it as one of their favorite gifts.

We do something similar.  We host an event that costs the reasonable amount we've budgeted, gives us time with people we enjoy and doesn't contribute to landfill. 

[oldladystache]

I guess I'm an extremist. I don't do gifts. Ever. My dad had his 100th birthday last year and I gave him a card. (I normally don't do cards either, but it seemed ok to make an exception)

Amazingly enough I get away with it. Relatives and old friends seem fine with it. New friends seem to learn easily.

What a relief!

[Catbert]

With regard to nieces and nephews in general I stop gift giving one year out of college/23 years old.  By then they should be self supporting so I might *exchange gifts* if they gave me something.  With regard to the 529s I'm not sure I understand.  Are all college expenses already covered by other 529s and/or scholarships?  Seems unlikely...or very lucky.  If the parents are paying I don't understand why they don't just use your 529 funds so it can be closed out. 

I think your housewarming gift was perfect.  Admittedly, it's been a lot of years since  I've been to a housewarming.   

[Trudie]

With regard to nieces and nephews in general I stop gift giving one year out of college/23 years old.  By then they should be self supporting so I might *exchange gifts* if they gave me something.  With regard to the 529s I'm not sure I understand.  Are all college expenses already covered by other 529s and/or scholarships?  Seems unlikely...or very lucky.  If the parents are paying I don't understand why they don't just use your 529 funds so it can be closed out. 

I think your housewarming gift was perfect.  Admittedly, it's been a lot of years since  I've been to a housewarming.   

My nephew's college expenses are being funded by a combination of:  (1) Significant 529 accounts that were set up by grandparents (my parents); exhausted by now, I think; (2) His parents' earnings.  I set up the 529 to be a little buffer with both.  At the time, I realized that it wouldn't be a financial windfall, but that it could help fund a computer, or a semester's worth of books, or something directly educationally-related.  The reason his parents are involved at all is because they are the guarantor of the college bills, they keep receipts to justify the 529 draws, etcetera.  So, the bottom line is that if the funds weren't used from the accounts we'd set up that it's more money that would have to come out of his parents' pockets, or debt he would have to assume.

The expenses are there to make a legitimate draw on these funds and it will decrease the financial burden on him/his family. 

After reflecting on this further, I do see a difference between making contributions to a 529 account (that has a specifically-designated purpose) and when it is established "intent" is discussed and making an outright cash gift or gift of stuff in which there is no intent, and it would be ridiculous to do so.  The fact that the account remains in my name means I really do retain control.  There are strings.  I regret initially posting about the 529 and "gifts" in the same post.  It's not the same thing.  And when I discussed the account at the outset with my siblings this intent was communicated.

In the past at holidays and birthdays I've usually done something fun for them -- take them out for dinner when I'm through town or their favorite homemade goodies on their birthdays -- and also made contributions to the accounts.  So it's not an "either/or" situation; it's been an "and" situation.  But, in general as their college careers wind down and they turn of age I'm grappling with how long we continue to give gifts AND make contributions to the 529 accounts.

Some context:  I come from an "education" family.  My husband works at a college.  When my nephews were coming up through school their parents agonized about getting them to college and paying for college.   My sister  and brother in law approached my husband often about various aspects of the experience -- filing the FAFSA, analyzing financial aid packages, how to reach out to academic advisors, and academic support (for a nephew with a learning disability).  Setting up the fund in the first place was about helping out financially but also communicating to them that we supported them ("we're in your corner") and felt it was important -- even if our contributions were meager.  So the funds are a reflection of what we value, and yes we're trying to communicate something to them about the long term value of education versus "stuff".  It is different entirely than giving them "stuff" and that's precisely our point.  The fact that they haven't been used up to this point is probably more a matter of mechanics and communication than anything.

[CommonCents]

Just let the kids know that as you told their parents when you set up the 529, you intended it for the kid's use only in college.  It's great they've received a lot of support, and you want to let them know that if they do not use it by the end of their college year, you'll [fill in the blank of what you'll do - rename the beneficiaries/bite the tax bullet and keep yourself/let them use for grad school if they go]. 

They can then talk to their parents and see if the parents are willing to do something different with the money they had planned to spend (e.g. give to their potential spouse instead, give outright to the kids, keep for themselves.)  I'm not really clear why your sister is insisting she spend the money on the colleges and force you to change how you've dedicated the 529 money.  It seems you can both easily achieve your goals if she were to do so.  (Her goal that leftover money goes to others, your goal that your money goes just to your nephew/nieces for college.)

[Trudie]

Just let the kids know that as you told their parents when you set up the 529, you intended it for the kid's use only in college.  It's great they've received a lot of support, and you want to let them know that if they do not use it by the end of their college year, you'll [fill in the blank of what you'll do - rename the beneficiaries/bite the tax bullet and keep yourself/let them use for grad school if they go]. 

They can then talk to their parents and see if the parents are willing to do something different with the money they had planned to spend (e.g. give to their potential spouse instead, give outright to the kids, keep for themselves.)  I'm not really clear why your sister is insisting she spend the money on the colleges and force you to change how you've dedicated the 529 money.  It seems you can both easily achieve your goals if she were to do so.  (Her goal that leftover money goes to others, your goal that your money goes just to your nephew/nieces for college.)

I think when my sister made that comment that the account could just remain untapped and rollforward she was half asleep... LOL.  I don't want to grossly misinterpret her intent.  But there's a practical issue here too.  I intended it for my nephews and nephews alone.  Both have significant others who they may marry before education is complete -- one significant other is finishing her undergrad and my other nephew's will be going to law school.  I never intended for the educational funds to support spouses after they combine finances.  (Keep in mind that I set the funds up when my nephews were adolescents.)  Anyway, all the handwringing is why I just need to draw it out for them to spend it on educational bills and be done.

I may even contact his college and see if I can write the check directly to the college "FBO" [his name] and apply it directly to his account.  I have his SSN, so I know it would get applied correctly.  I would tell his parents, of course, but then we'd be done.

[kandj]

I think there is no reason for gift giving to go on forever for kids. I'm 23 right now, and on my moms side of the family they made the decision to stop birthday gifts at the end of highschool, and honestly at the end of middle school would have been fine too. None of us as kids were upset because we all knew that would happen, and we still get together for special meals for birthdays.

We've also been doing the christmas name draw for several years and we all love it. At first my mom and aunt were nervous to broach the subject with the family but everyone was so relieved. It includes anybody over 18 and it is always fun. We draw names at thanksgiving and try to keep it to a $30 or so limit. A lot of us have been doing experience gifts, tickets to something or a restaurant gift card. Nobody needs endless amounts of things. We also do a "white elephant" game with the entire family, the kids especially love it as do my grandparents. It is a lot of my grandparents getting rid of useless garbage from their house, but there are always some fun things like cookies or lottery tickets in addition to the funny random stuff. Sometimes people really appreciate not getting stuff as well. My husband and I gave his parents a card last year for christmas and said we would take them out to dinner. We were nervous about it because that family goes WAY overboard with gifting, but his parents were so happy about it and said they wished all their kids would do that. I wouldn't feel bad about getting away from excessive gifting as long as you still make an effort to give a meaningful card or spend time with them.

[jaye_p]

We buy birthday and Christmas gifts for our son only (we have only 1 kid, so we're not deliberately snubbing an offspring, lol).  Our thinking is that, with a joint account, there is no point buying something for each other, since we'll immediately see the charge in Mint, nor do we need anything.  Our parents and my husband's sister, niece and nephew do not need any more stuff either.   I brew mead, so I'll give a bottle of it to friends and interested family members.

We don't go hog-wild with gifts for our kid, either.  Usually there will be one "big gift" (skateboard, RC vehicle, something like that), a couple of little things I found at the thrift or yard sales, and maybe something consumable (this year it will probably be a $95 season pass to a local water park).

It works out well.

[alexrcraig]

I am probably nearly the last person that you want to ask because I give gifts like the Amish.

The Amish only give gifts that people need and when they give a gift it is only one gift and less than $20.

1. For those kids, I would have drawn the line a long time ago. But it sounds to me like they are old enough to work. I believe in teaching the lessons and values of hard work. Despite the rampant student loan problem, I think it teaches people stuff:

a. You are making an investment in your future
b. Financial responsibility and hard work

So if it was me, it sounds like they have had a lot of their college paid for already. I would stop with giving them gifts. If they need college to be paid for then they should go get a job. I worked my through college and paid all of it of on my own. I wish I had an Aunt like you because I had to pay my entire college. But like I said, I learned a lot of lessons from it.

2. I would never buy a house warming gift. This idea is so strange to me. Why is someone buying a house a cause for celebration?

I do not get this one at all because whatever you buy them is probably going to be thrown in the trash. Sad but true...

3. I do not get anything for my siblings. Actually maybe that's not true....

My wife and I donate a lot of money so what we do is for the month of December, rather than us picking where we give our money, we let our siblings pick. They get to name the organization that they would like us to give to.

When my wife and I first got married I think it was like $25 it has since gone up to $100, but this is money we were going to give away anyways. Rather than giving them a gift we want to give them the greatest give their is which is giving! So we give them the gift of giving.

This does not cost us a single dime because we intended to do it anyways, but my siblings do not know that... Hopefully they do not read this forum.... lol :)

Other than that one time for Christmas, we do not give them anything.

4. I agree with the parent thing. There usually is not anything they need. My parents are already financially independent and could afford anything from the store that I could ever buy them, so it usually would result in you buying some crappy thing they do not need.

So I do not even bother with this one.
_____

Like I said, I am pretty frugal when it comes to gifts.

I give my wife one present a year and it is usually something she needs like underwear, a book, or something like that.

[The_path_less_taken]

If I answer this honestly I'll be kicked off this forum....

Ah well: I love giving gifts. I think kite has the best philosophy posted so far, and the Amish thing is nice.

But I am probably in the 'extreme' gift giving category. I once sent a couple to Hawaii, all expenses paid. (and....I've never been there! but they needed to go due to some trauma, I had the money, I sent 'em).

I'm not 'always' like that. But just like when you're writing, and there is 'one' perfect word to express something...at any given time there is one perfect gift for someone. Something that fits them, that delights them, that speaks to their core being, that makes their eyes light up with joy, etc.

Finding that, and being able to share that with them is awesome. Doesn't have to be expensive: went to a friend's church once for her birthday. She's always trying to convert me (never gonna happen) but it made her so happy that I did that, it was worth it to me.

I only have a few people I gift regularly though now my Dad has passed on. But they're always something that delights the person.

Worth it, to me.

As for the OP questions: the housewarming was fine, whatever you decide to do with siblings is fine. The 529 is problematic because even though they are now wanting to change from your original agreement, it's still a gift. So I'd let it go. But if I gave money for a certain purpose and felt it wasn't being used for that: I'd stop.

Years ago I was sending money to Tibet to supposedly help with the care of orphans...the 'child' was supposed to be writing me letters but the letters would have stuff in them like "when the Chinese invaded life became hard for me". And the fact that it was obviously an older adult writing pissed me off: a ten year old kid can write, or draw a pic, or whatever. I quit sending the money.

Like SO many things on this board, and in life, you really have to decide what you believe in and what matters to you. And act accordingly.