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For more on marking an answer as the "Best Answer", please visit our FAQ.For the newborn, what about baby bath, lotion, talc, shampoo etc, and nappies! I have done this kind of 'New Baby' present before and it was very well received as these things are always useful.
For a 1yr old, yes clothes are a good idea, or what about opening a savings account, then for birthdays and Christmas a 'deposit' could be made.
Good luck
I am a great aunt, who has never been a mum. When my great niece was born, on the advice of friends of mine with kids, I gave second and third size clothes as they all said that they got loads of first size, the mum was delighted. I take pleasure in buying books for kids, there are loads of lovely ones, not too expensive. My niece is now just one year old, has been read to since birth and now goes and gets a book and sits on the floor "reading" to the cat. If you want to give a bigger gift then I think that cash is a good idea. Eventually the children will want to go to uni, need driving lessons, a gap year etc and a nest egg then is going to be a useful thing.
Other suggestions would be a cot mobile, there are some lovely gizmos that project pictures around the wall and have a motion sensor in so they start as baby moves. For the one year old, they are still at the everything goes in the gob stage, so you need to be a bit careful what you choose.
Re NewBaby Box with talc etc...... I got one of these from a non-parent when my baby was born. It was a very thoughtful gesture and I know I may sound ungrateful, but most of the stuff was not useful!! Talc/baby powder is not recommended as the baby breathes in the dust and it can damage their lungs, baby oil and stuff like that is quite purfumed and has other chemical stuff in it that is not good for baby's skin. However, you can never have enough wipes or nappies and instead of lotions or baby oil, olive oil from the chemists is fab and won't upset their skin.
Also woolies clothes come up very big - mine is nearly 9 months and is just starting to wear ladybird 3-6 month stuff!
And I forgot to say to be aware of the seasons if you are buying clothes as I ended up with snowsuits that only fitted during the summer and lovely summer dresses through the winter!!
Also Mothercare is VERY expensive. Try Primark if you have one as they are VERY cheap, so you can get loads more things for the same amount of money. The quality is fine for what they are - may not be lined and triple stitched but remember that they are only in them for a matter of weeks anyway so won't wear them out. I've never had any complaints with Primark stuff - even second hand.