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Should You Give Kids Money For Christmas?

Lots of people don't like to gift money on special occasions as it is seen as "Thoughtless". In this blog, I am going to set out why I feel that parents and other family members should give kids some money this Christmas. Better still, they consider investing money for the kids.

As I'll explain later, I don't mean you should buy kids gift vouchers instead of presents. Don't buy gift vouchers!!

Isn't giving money to kids "Thoughtless"?

There's a perception that giving money to kids is 'thoughtless' or 'lazy'. It's easy to see why that might be the case. You merely pulled out some cash from your wallet/purse and tucked it into a card, DONE! This doesn't feel as thoughtful as going to the shops and picking out presents that you know they want and will enjoy.

Let's be honest, in most cases, after buying the first few presents we probably aren't being very thoughtful. Ever found yourself dashing into the toy shop, grabbing those last few items just to bulk up the present pile?

If you are giving your kids money with the intent of helping them learn about money, then I really do believe this is more thoughtful than giving them an oversized chocolate bar or a pot of colourful slime.

5 Benefits of Gifting Money to Kids

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

  1. Allows the child to save up for something they really want

  2. Allows them to add to their savings account or start investing (more this later)

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

  4. Allows them the opportunity to give to charity

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

It's important to note, that this refers to cash gifts. Don't give your kids gift vouchers.

Why you shouldn't buy gift vouchers

Whilst you might feel it is more ‘thoughtful’ to buy gift vouchers than giving cash, it actually takes away the ability to do anything else but spend that money. If you look at the list above a gift voucher takes away nearly all of the benefits.

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. What a waste of money!

Giving cash vs gift voichers

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

The long-term gift of investing

Whilst giving money is great, one alternative is to invest that money for kids.

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, such as Christmas.

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 if I simply bought him more gifts (as I know he has generous parents, family and friends).

Whilst I don't suggest investing in individual companies, the illustration below shows the long-term benefits of investing in companies rather than just buying products/services from companies:

value of apple stock price vs an iphone from 2012

To learn more about investing for kids, check out the Ten-Year Investment Plan For Kids blog.

Gifting money to other kids

If you are still worried about being seen as 'thoughtless' when giving money, especially to other kids than your own, you could try these tips:

Tip 1 - Write a thoughtful message

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 2 - Give money with a small money-related gift:

One way to avoid the perception of being thoughtless or lazy is to gift the money with a small money-related gift. For example, you could buy the Monopoly Deal card game and or a kid's money book and put the money inside so they can apply what they learn.

One reader of my blog now gives a copy of my money book, Grandpa’s Fortune Fables, with £10 inside and a note saying ‘Invest this money wisely’ 😊


Gifting money with the intent of helping them learn about money is very "thoughtful". It can make a much bigger impact on their lives than those last few stocking filler presents (which probably won't get used).

Remember, better to give cash than gift vouchers!

This is especially true if you help your kids invest some of that money (start their Ten-Year Investment Plan For Kids)

Help normalize gifting money to kids on special occasions by asking your friends with kids:

"What do you think about gifting money to kids for Christmas?"

I hope you found this blog useful, if so you should subscribe so you don't miss out on future tips to help your kids learn about money.

Thanks for reading!


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

grandpa's fortune fables by Wil Rainey book cover


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