As a parent, you may be wondering how to give money to your kids. But before you open your wallet, read this article first. Young adults are under financial strain, and you may be aware of this fact. After all, your 20-something kid might be saving for a skateboard instead of a mortgage. Here are some practical tips to help you give your kids a helping hand. You may also want to consider giving money to your kids at milestone events in their lives.

As a parent, giving your kids money can be a rewarding experience, but you need to be thoughtful about the decision. Maybe your son has his heart set on a certain house, and he or she asks you to help them buy it. Or maybe you want to help your daughter launch her own business. Whatever your child wants, consider the emotional and financial implications of giving them your money. Giving your kids money is a great way to show your appreciation for their hard work, but it also has many risks.

When giving money to your kids, make sure that you are clear about why you are giving it to them. A gift may be appreciated, but a check or cash is unlikely to be well-received. If you’re trying to teach your kids about financial wealth, it’s best to start early. A child’s personality and family beliefs will have a lot to do with what they’ll appreciate. If you’re not sure whether to give them money or not, talk to them about your plans.

Don’t wait until a child is a teenager to give him or her money. Gifting money to them early on will set good financial habits. You can also help your child create a money jar and encourage them to save for it. Another great way to give money to your kids is by donating to a charity. This way, your child will be able to see the true value of giving money to others.

If you have young children, you may want to consider contributing to a 529 plan. A 529 plan allows you to give your child money for college tuition and other expenses. The annual exclusion gift limits are enough to buy a median-priced car or help pay for graduate school tuition. Unfortunately, the annual limit is not enough to buy a house before the child reaches age 30. You’ll be glad you did it.

While giving money to your children has tax advantages, you should also consider how much money you can gift tax-free. Gifts can be tax-exempt if they are immediately accessible. The IRS sets a high bar for gifts, and most people will never reach it. A gift can also help kids through a rough financial time. But make sure to do your research before making any big decisions about how to give money to your kids.