Gifting Money to Family: 6 Rules to Follow

Money is a go-to for many people when it comes to gift-giving. It’s not the most personal gift you could give, but if you’re not sure what the recipient would like, you can spare yourself from guessing incorrectly and allow them to spend the money however they choose.

However, the etiquette surrounding giving money as a present, especially during the holidays, is frustratingly unclear. Many families have experienced some tension or a dramatic outburst because someone didn’t understand the unwritten rules. To avoid offending a loved one this year, follow these tips when gifting money:

Of course, give according to your means. Don’t feel obligated to drop $100s on your nieces and nephews if you can’t afford it. Even if your siblings give your kids a significant amount of money, shrug off the pressure to match them. Generosity is proportionate to what you have, not the dollar amount itself.

Better yet, plan a budget that accounts for all of your gift-giving each holiday season. Other gifts cost money anyway, so set aside a specific amount you can afford for your entire family. Write down how much you spend on physical or experiential items to get an idea of how much cash you can give to friends and relatives who won’t be receiving something else.

Cash is not an appropriate gift for everyone. As mentioned previously, it’s not particularly personal, so giving your significant other an envelope with $50 or a gift card to a department store probably won’t go over very well. Giving money from one high-earning professional adult to another could also be interpreted rudely; cash is usually for people who need it (a check would be preferable in this case) or children who are excited about the freedom it entails.

So, your cousin’s child who just turned 10? Cash is perfect. Your cousin herself who’s not in any debt? If you’re close, then something more thoughtful would be better.

When gifting money to family members, consider what they will use it for. It may be that it’s none of your business, but a relative who is struggling with money would undoubtedly appreciate a bit of extra generosity (especially if you’re in a position to be generous).

Giving loved ones financial aid during the holidays is where things get really tricky. Make sure your intended recipient is open to it, first — not everyone is willing to admit they need help — and give an amount you believe would make a legitimate difference (remember that gifts are tax free under $14,000 or $28,000 if you and your spouse give as a couple). You don’t have to give naked money, either; it’s possible to pay for expenses like college tuition or medical bills directly. It would also be kind to introduce your relative to a family finance app that helps them improve their overall situation.

If you want to know how to send money anonymously because your family member might be embarrassed about needing assistance, then you can use a money transfer service like WesternUnion. You can also make a new email address your relative won’t recognize and send it to them via PayPal or Xoom, a Paypal service.

Gift cards are popular ways to give money as a present. Sometimes it’s nice not to have endless possibilities of how you could spend a gift — if you have a gift card to a bookstore, then you have to spend it at that bookstore. It’s a roundabout way of buying someone a book; they just get to decide which. Gift cards are a mid-way between the safety of giving someone cash and something more personal.

On that note, make sure the gift card you buy someone is for a business they would gladly shop or dine at. Your loved one won’t appreciate a gift card to Starbucks if they hate coffee. Put the card in an envelope and include a note so your recipient doesn’t feel like you made the minimum effort.

If you’re a grandparent gifting money to grandchildren, then you need to treat them equally and give the same amount to each. If you are someone younger and don’t need to distribute your generosity equally amongst your relatives, then it’s wise to be polite about it — that is to say, discreet. Don’t flaunt your gift-giving to relatives who aren’t receiving anything from you, and ask them not to say anything. You’ll save yourself a lot of resentment.

Because money is a generic gift (however practical), put a little effort into its presentation. Make dollar bills into origami shapes. Put cash inside balloons and make children pop them. Hide money at the center of a 3D puzzle. Freeze bills in a block of ice for a pun on “cold, hard cash.” The way you present your gift can add extra layers of thoughtfulness, intimacy, and fun.

Gifting money to family members comes with a set of rules no one really understands, so just remember to be considerate, don’t feel pressured, and find a way to add a personal touch.