Imagine that you ask your 13-year-old for their holiday or birthday wish list, and in the top spot is one word: money. What’s the best way to go about giving your children money as a gift?
Here are answers to some of the most common questions about gifting money to children and tips for doing it in a way that can help build healthy money habits.
When is the right time to start giving your children money as a gift?
There’s no universal rule about the best age to give money to kids. It depends on the child’s personality and level of maturity. For example, a 3-year-old may look at a dollar bill as green craft paper, and a 7-year-old may think the gift of money is boring. But by age 9, some kids may start to understand the concept of saving for things they need and want. As a parent, you’ll know best when your child is ready to start learning some of the fundamentals of money management—even if it’s at a very elementary level.
How much should I give my kids as a gift?
The dollar amount of a monetary gift will vary from family to family—but you could try basing it on how much you’d normally spend on a gift for them. The amount isn’t the most important aspect of the gift, though.
“Exposure is the most important thing at a young age,” says Frazier.
Choosing a cash gift amount that fits your family’s budget and having a plan to help your child understand the gift’s value are key. Whatever the amount, consider helping them designate different portions of the gift toward different goals.
