Few things compare to the joy of watching someone you love unwrap a gift you chose especially for them.

But for many people, giving a financial gift can be more meaningful than a physical present.

Some of the most popular financial gifts include contributing to college costs, giving to charities, family vacations, cash and stock, according to Cyndy Ranzau, a wealth strategist with RBC Wealth Management–U.S.

They’re the kind of gifts that in previous generations may have only been given upon their death.

“Many people already have all they need,” Ranzau says. “They want to share what they have and support charities that are meaningful to them, or see their children and grandchildren enjoy their money while they’re still here. That really brings joy to their hearts.”

Cash is king

Probably the easiest financial gift is cash. 

Each gift up to $18,000, or $36,000 for a married couple, is excluded from gift taxes. 

Some parents give their adult children money—$7,000 or $8,000 if they’re over age 50—so they can make their annual contribution to a Roth IRA or traditional IRA, Ranzau says. That’s helpful if the recipient has hefty medical bills or just can’t save much money, she adds.

“For many people, December to January is a tough time for budgeting with the holidays and year-end bills such as property taxes,” Ranzau says. “People give financial gifts simply to ease the stress of a really expensive time of year.”

It’s all about children

Many parents and grandparents like the idea of a gift ushering their children or grandchildren down the path of financial literacy and financial responsibility, Ranzau says.

“Giving kids a financial gift starts the conversation of how much to spend on something for myself, how much to save toward a major goal and how much to share with others in need,” she says. 

Grandparents can also consider contributing to their grandchildren’s 529 college savings plans.

“It’s a great gift because it can help lower the giver’s estate,” Ranzau says. Although each gift of a 529 plan contribution is limited to the $18,000 annual federal gift tax exclusion, you can contribute up to five years at once or $90,000 ($180,000 per grandparent couple).

Moreover, some grandparents will directly pay the college tuition of older grandkids, Ranzau adds, because there’s no maximum amount. People can give an unlimited amount each year to someone for tuition if paid directly to the educational institution and all of it is excluded from federal gift taxes.

Gifting to charities

The holiday season is when many people think about helping others who are less fortunate or donating to worthy causes.

In addition to charitable giving being a rewarding experience, it can also come with tax benefits.

For example, people can give appreciated stock to benefit a charity and reduce their capital gains at the same time. When the nonprofit sells the stock, it won’t have to pay capital gains.

Another option is to open a donor-advised fund (DAF) to realize the tax benefit now for charitable contributions made in the future. You can take charitable income tax deductions and make additional fund contributions that generate more tax advantages in future years.

A donor-advised fund is created with a parent nonprofit organization, such as a community foundation, that handles the investments and administration of the fund. You still choose what charity to support and recommend the timing and amount of gifts.

However, DAFs are not all the same and won’t be suitable for all investors. Funds invested in a DAF may not be distributed to your chosen charities promptly, and some DAFs place restrictions on the types of charities you can designate as beneficiaries. It’s important to consult your financial and tax professionals before investing with a DAF so they can guide you through the due diligence process and help you get the most out of your charitable gifting strategy.

If you’re over age 70.5, you can make a charitable gift directly from your retirement account to satisfy the required minimum distribution. Ranzau sees more people embracing this method in recent years because the gifted amount is excluded as earned income from that year’s income taxes.

Additionally, you can check to see if your employer has a charitable gift-matching program to stretch your dollars.

Establishing a tradition of legacy

Beyond the tax benefits and satisfaction of helping a loved one or donating to charity, financial gift-giving can be a way for families to begin building a financial legacy, Ranzau says.

While conversations about money can be challenging, those barriers can be broken down when the conversation in is in the context of giving.

“More people are passing on their values around money in gifting. They’re breaking the ‘money silence’ to start having conversations across generations to instill their values in their family members,” she says.