You’re probably fairly used to helping family out with a little extra cash from time to time. Whether it’s pocket money for doing chores, or money to pay bills, go see a movie or buy clothes, for example.
But what happens when they put their hands out for help to buy rather big ticket items? They might want some money to buy a car, pay for a holiday or even get a deposit together to buy their first home.
The question is, even if you can afford to help your family financially, should you? It could provide them with a helping hand that’ll really make a difference, but you also must ensure your needs are looked after and you’re not leaving yourself short.
It’s a great, tax-free way of helping your family when their need of financial help.
Just make sure you think carefully about whether your gift will put a dent in your retirement savings and if you’ll have enough for the lifestyle you want to lead when you wind down from work. Try the AMP retirement simulator to find out how much you’ll need.
Also consider the impact any Centrelink entitlements. If you’re receiving benefits, such as the Age Pension for example, a loan or gift to your child may impact on your payments and your financial security. You must tell Centrelink about any gifts or transfers within 14 days of when they occur.
This is one way to help your family own their tomorrow whether it’s buying a car or first home, but be careful not to put your own home or lifestyle at risk in the process. Make sure you only go guarantor for an amount that you can comfortably afford to pay if your family defaults on payments.
What else to consider
Whatever option you choose to help support your family, make sure the loan or gift is within your budget and won’t affect your everyday lifestyle or retirement. Also consider taking out insurance to cover you, or your family member, in the event of unforeseen circumstances. It’s a good idea to get in contact with us if you would like to discuss your circumstances.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
Shanley Financial Planning Pty Ltd trading as Steve May Financial Services (ABN 19 612 825 180) is a Corporate Authorised Representative of (1265706) of Sensibly Pty Ltd (AFSL 533923)
Nick Shanley, Steve May and Luke Styles are Authorised Representatives of Sensibly Pty Ltd (AFSL 533923)