Giving Money As A Gift: Is it Better to Give Cash or a Present?

Gift Giving presents under a christmas tree.

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Gift Giving for Kids, it’s an age-old question. Should we give our kids money for Christmas or should we just give them presents. You might be surprised by our advice to this family!

Question About the Holidays and Gift Giving for Kids

I have your three books and have read about the MoneySmart Kids System that teaches kids to manage their own money; I have a question regarding giving money for holidays (to your children). Do you give money to your children for holidays or do you have a rule to not give money?

Our Strategy with Gift Giving for Kids

We don’t usually give money to our kids for Christmas. This is because our family enjoys the tradition of opening presents. Yes, it is more work for us, but so much more fun! 

We shop all year long, looking for things we know our kids would appreciate. We store the presents in bins in our Gift Closet.

How we Budget for Presents

We do set a dollar amount that we spend on each gift recipient. But the cool thing is that because we shop all year long, we’re able to lavish them with a larger number of gifts.

This is because we can usually find things at steep discounts as we watch, wait and shop all year long. While a flat dollar amount might be easier, being able to give lots of presents for the same amount is more rewarding. And our kids certainly enjoy opening lots of presents.

Years ago we created a Gift Budget worksheet. While it may sound a little materialistic, we used that worksheet to help us establish a spending amount per child.

We also used the Gift Budget Worksheet to plan for everyone that we wanted to buy a present for around the holidays.

We not only included Christmas gifts but also included birthdays and amounts for wedding and shower gifts, baby showers, and teacher gifts.

Then we pick an annual amount and break it down for what we need to save with each paycheck.

Saving throughout the year has allowed us to give gifts without worrying about overspending.

There are 2 ways you can get a copy of the Gift Budget Worksheet:

1. Become a Website Member

2. Purchase our America’s Cheapest Family Budget System

Sometimes We Do Give Money as a Gift

We also try to find appropriate presents for birthdays.

Depending on how busy we are, sometimes we simply give money. This happens if we know the kids are saving for something in particular.

Our older married kids get a gift card to one of their favorite stores or restaurants. Our son John is a new homeowner so he loves Home Depot gift cards.

Are they Financially Responsible? One thing to keep in mind is whether giving cash as a gift will help our hinder. If your child is irresponsible with money or has an addiction or other emotional spending issue, cash may not be a good gift.

In this type of situation we usually give practical gifts like food baskets, or gift cards for gas or groceries.

If they are financially reponsible and we know they are saving toward a goal, we would give cash with a note that encourages them toward reaching that goal.

Sometimes we Give Gift Cards

Of course, when buying gift cards we try to find a way to get some sort of discount. We’ve found that Kroger Grocery Stores usually run a promotion during the holidays where they give you quadruple (4x) gas points for each gift card purchased.

As a result, buying a $25 gift card, translates into 100 points or 10 cents off of a gallon of gas. It takes 30 gallons to fill our tank, so our savings is $3. It’s not much, but every little bit helps.

There are some great retailers or restaurants that that offer perks for buying gift cards. Red Robin gives $5.00 off $25.00 and Sweet Tomatoes/ Soup Plantation gives out a free meal coupon if you buy $50.00 worth of gift cards. (you can buy 2 $25.00 cards).

We earn free gift cards through Swagbucks and have given these as gifts to our kids.

Sometimes we Give Experiences

Disappearing presents are also an option.

Things like tickets to a show, concert or fun park are always considerations.

Or it could be home made certificates for a special one-on-one time with Mom or Dad. Or a trip to see Grandma and Grandpa (if they live out of town).

Gift Giving Wrap Up

The bottom line is to plan ahead and give gifts that empower your kids to reach their goal. Gift giving for kids should be an overflow of our hearts, not out of compulsion. Give your kids the best gift you can . . . be available to them. . . that costs very little financially but means a lot relationally.

For more ideas on how to love and encourage your kids, consider following us on Pinterest and viewing our kids/Babies/Teen Board!

Gift Giving for Kids - Should it be Cash or Presents?

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4 thoughts on “Giving Money As A Gift: Is it Better to Give Cash or a Present?

  1. Julie

    Some of the best gifts we received when we had a young family (and no money) were annual passes to local science museums, aquariums, zoos, etc. Had my parents given us cash at that time, I have no doubt that it would have gotten absorbed into our tight budget. It translated into about $25 per person for the gift giver and provided us with enjoyment all year long. Many zoos, etc have reciprocal arrangements so we were able to use the passes at not just our local venue.

    1. steveecon

      Julie – you’re so right – these kinds of gifts were things we wouldn’t have spent our money on, but we truly enjoyed when our kids were younger too. They also didn’t contribute to clutter – they were “disappearing gifts.”

  2. lisa

    Gift giving or gift cards? Well, it depends on the age, schooling, activities and preferences of the receiver.
    I have a 20 year old that loves presents, gift cards and cash. He’s easy to please. He’s into cars, emergency car things, clothes and video games. But he also has a student loan. This year, he will get clothing, gift cards, a gas card and a note in his holiday card that says how much was paid towards his student loan for the year .

    I have an 18 year old that loves festive presents with curls and swirls. He likes gift cards and cash, but not as much. He’s an avid reader, a Boy Scout, and video game guy. This year, he will get clothes, gift cards, a book and most importantly, gift subscriptions for some cool gaming items. He loves things to arrive by mail and surprises, so this will be his favorite. I have given him comic book subscriptions in the past.

    I bet you’re thinking that I must’ve spent TONS of money on these things. Actually, the subscriptions were the most costly, but I got them at deep discounts on Cyber Monday. ALL gift cards were free through Swagbucks and credit card rewards programs. Other items were purchased from Ebay or found online as a promo offer (I was able to get kits that included a men’s razor, replacement blades and shaving balm for $3 or less!). I even snagged extra free gift cards with purchases. I was able to give my sister and her family gift cards, which mean I spent $0 on them this year (ssshhh…She might get mad at me for that).

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