top of page

Breaking The Taboo: Gifting Money to kids

As I've written in my previous blogs, I believe kids should be given money from a young age to help them form great money habits. This money could come from parents giving their kids pocket money (allowance) or by earning money via a mini-business. The other source is from being given cash from friends and family on special occasions which is the focus of this blog. It's a sensitive topic as some see handing over cash as 'not the done thing'.

SUBSCRIBE: Tips and stories to help you teach your kids about money delivered to your email box for free each week. Subscribe to BlueTree today.

Gifting money is “Thoughtless” and"Lazy"

There are some people who see gifting money as ‘thoughtless' as you simply just grab it out of your wallet/purse just before leaving for the party and stick it in a card.

This doesn't have to be the case. Gifting money can be very thoughtful and has many benefits as I'll discuss shortly.

Don’t get me wrong, giving someone a truly thoughtful present is something we should all strive for, however. it’s just not always possible.

When we do buy presents, in most cases we probably aren't being very thoughtful. Ever found yourself dashing into the toy shop, to find something for around £20, a few hours before the party starts or, stockpiling some generic plastic toys at home in reserve for multiple parties falling in one month when free time to shop is limited?!

Also, when it comes to money, we are all insecure. We worry about being judged on the amount itself so want to avoid this situation. We come up with scenarios in our heads when thinking about how much to give. We think the parents of the child might say to themselves:

  • “Sally’s parents only gave little Timmy £10”

  • “I would have thought Dave’s parents would have given a bit more”

This is again something we need to overcome if we want to make a difference to the financial future of the next generation. Also, we have to remember that most parents know how much most presents cost to buy.

Personally, I feel we need to overcome these fears about appearing ‘thoughtless’ and worried about how much to give. This is because there are so many benefits when giving children money on special occasions.

Benefits of gifting money to kids

There are many benefits when gifting children money rather than presents:

  • Allows the child to save up for something they really want

  • Allows them to start investing or adding to their savings account

  • Allows them to make money decisions (or mistakes) which they will learn from

  • Allows them the opportunity to give to charity

  • Reduces plastic/paper waste from toys/books which might not be used for long

When gifting money to kids, give cash rather than vouchers

I note that this is referring to cash gifts rather than vouchers. I’ve got a short section on vouchers later in this blog.

Don’t get me wrong, we don’t want to get to a point where kids aren’t getting any presents to open on special occasions and only receive money. This is about making sure that what gifts they receive are thoughtful and make a positive impact.

When it comes to gifting money to kids, there are two different scenarios which I want to cover:

  1. Gifting money to kids instead of presents

  2. Asking for money rather than presents for your kids.

For both scenarios, I want to share a real-life story and some tips on how you can overcome some of the barriers.

SUBSCRIBE: Tips and stories to help you teach your kids about money delivered to your email box for free each week. Subscribe to BlueTree today

SCENARIO ONE: Gifting money to kids instead of presents

Real-life family story about gifting money

Here’s one real-life story from a mother I was speaking with recently:

Twenty-one years ago, my friend decided that when her niece was born, instead of giving the new baby presents, she set up an investment account and put some money in there on special occasions.

There was one big problem with this. The mother of the niece didn’t like this at all. She thought that her sister should be giving a present to her daughter on special occasions rather than money. This caused tension in the family, especially as the mother would buy and wrap gifts with a label saying they were from her sister (my friend). This is because the mother thought that her sister should buy a gift to show her love and appreciation towards her daughter, as she did for my friend's children.

When the niece turned 21, her Auntie gave her the money. She couldn’t have been more happy with the financial advantage she’d just been given (and said) "This is better than any toy or book I could have been given". The mother also realised just how special the monetary gifts from her sister were (the benefit of hindsight!).

This gift showed the niece the power of delayed gratification and compound interest as the amount she got was substantially more than the amount her Auntie contributed.

As I’ve shared before, for my godson, we have been putting away £10 each month into an investment account instead of gifting presents on special occasions. We have been updating him on the amounts when we send him cards. By the time he is 18 years old, I hope the amount will be in excess of £4,000. I truly believe this will be more beneficial to him than more gifts (as I know he has generous parents, family and friends).

Tips for this scenario

If you want to give money but fear that it might not be appreciated by the parents, then here are a couple of tips.

TIP ONE: Be open about why you are gifting money

Many people have the view that money is ‘thoughtless’ so it’s good to be proactive and leave a message in the card highlighting why you are giving the money. This could be:

“Here is £x which I hope you use towards buying something that you have been saving up for”
“To help reduce plastic waste, I wanted to gift you money so you can buy something that you will use many times or use it to save for the future”

TIP TWO: Money and small gift

One reader of my blog now gives a copy of my book, Grandpa’s Fortune Fables, with £10 inside when her son is invited to a birthday party. The son writes a note to say ‘Invest this money wisely’. This is the best of both worlds as it is an educational book plus it helps to see that it’s ok to give money if there is a purpose for doing so, i,e. To help the boy's friend learn and start growing their money.

Both of these ideas will help you make a difference in the financial future of a child. Hopefully, it will allow them to buy what they really want or to start to save for their future.

BUY NOW: Grandpa's Fortune Fables is a best-selling money book for kids. Helping kids learn to earn, invest and look after their money using stories. Grab a copy from Amazon

SCENARIO TWO: Asking for money rather than presents for your kids

Real-life family story about asking for money

A child had a birthday shortly after Christmas. They had most of the toys and books they wanted. The son, aged 8, preferred to receive money for his birthday so that he could save up for what he wanted (plus he wanted to see his money grow after reading Grandpa’s Fortune Fables 😀).

The parents sent out the invite and suggested that if guests wanted to give a gift then their son would prefer money rather than a toy or a book. This was not well received by the other parents who preferred to buy a present.

This is unfortunate as the presents are not what the child really wanted but they did help ease the party-goers' parents fear of giving money and getting the amount wrong!

Tip for this scenario

If we want to make a change then we have to be brave. We have to empathise with the feelings of other parents if we want this to be accepted.

[Name of your child] would love [guest name] to come to his/her birthday. No gift is necessary, it would just be great to see you there!
If, however, you do want to bring a gift, we appreciate that asking for money is not the ‘norm’ but we feel that [name of your child] is lucky enough to have many of the things he/she wants. [Name of your child] therefore asks for a token donation towards his/her future [fill in blank e.g. first car], as [he/she] has been learning about the importance of looking after money.
We will be leaving a letterbox on the table for any small birthday donations. Of course, do not feel obliged.

It always helps if there is a clear intent for the money being donated to your child. This could be towards something they are saving for or, being used to build their future wealth. It could even be towards a charity.

Make sure your kids are supportive of this initiative. Clearly, you don’t want your kids to be expecting lots of presents, only to find that they have nothing to open.

We also have to remember that there are many occasions around the world where gifting money to children is commonplace and makes a big difference. Particularly the ‘Red Packets’ given on Lunar Year in many Asian countries.

Red packets

Red packets are a great way for kids to learn about money

In Asia, many families celebrate the Lunar New Year by giving children red packets (red envelopes) which contain money. This money is seen as ‘lucky money’ and in most cases, the person who gives the money tries to get freshly printed banknotes. It doesn't need to be a large amount, just a token amount will do.

This money is usually taken from the children by the parents and put away in a savings account or an investment account. I’ve heard a lot of stories of parents buying stock in the best-performing company of the previous year (which is not a great investment strategy but certainly better than putting the money in cash or spending it all). This money is then given back to the child when they become adults.

This culture of giving money and saving it gets passed down the generations. Whilst the money makes a difference, it is the real-life learning about saving and gifting money that really makes a positive impact.

Don’t buy gift vouchers

A middle ground that people use is gift vouchers. Whilst it might feel ‘thoughtful’, it actually takes away the ability to do anything else but spend that money so it is worth less than cash.

A friend told me that when their son went off to university in the US, they were clearing out of his room and found $230 worth of unused (and then expired) gift vouchers in a drawer.

Personally, I would refrain from gifting vouchers. They are just a money-making scheme for companies, so it is much more beneficial to gift cash than vouchers. My friend wrote a great blog on this topic which you can check out here.


Gifting money to children has many benefits, both to the child and our planet (reduced waste). We therefore need to be brave and overcome some of the insecurities about giving and asking for cash gifts for children.

I recently did a poll to ask people if they feel gifting money to a child was ‘thoughtless’ and only 3% of people thought it was. So, whilst we believe that people will judge us for giving money, it is actually only a small percentage of people.

I hope the stories and tips are helpful in terms of the actions you take for future special occasions.

One of the key actions is to say why you are giving money instead of presents. This can be a catalyst to start talking about, and breaking the taboo status of, money. If we don’t talk about money, then the trend of young adults suffering from financial stress will continue.

As always, if you have a family money story that you feel is worth sharing, then please email me

If you want to help break the taboo of gifting kids money on special occasions, please share this blog with friends, family and social media.

SUBSCRIBE: Tips and stories to help you teach your kids about money delivered to your email box for free each week. Subscribe to BlueTree today.

Thanks for reading!


P.S. ,I love that one set of parents gifted copies of my book, Grandpa’s Fortune Fables, instead of party bags to the 15 guests of his son’s 11th birthday party. This was certainly more impactful than some sweets and plastic toys but clearly, I’m biased. Click here if you want to buy 5 or more copies at a discount.

Money book for kids, Grandpa's fortune fables, grandpa teaching granddaughter about money


bottom of page