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Should you give kids cash for Christmas?


Does giving cash lack Christmas spirit?

This article is published by Modoras Pty Ltd ABN 86 068 034 908

Giving Kids cash for Christmas. Is it lazy? Or a lesson?

Kids given cash for Christmas may make poor purchasing choices if not supervised. Source: Adobe stock

Kids given cash for Christmas may make poor purchasing choices if not supervised. Source: Adobe stock

For many time-poor parents, grandparents, aunts, uncles or godparents, the option of giving cash at Christmas is a godsend. Cash is easy to organise, cheap to post, and gives the added gifts of freedom and choice to the recipient. Family members living overseas or interstate can achieve legendary status by sending cash to hard-to-please child relations without fear of getting it wrong. But be careful, there are downsides to giving cash too. Unsupervised Christmas cash gifts will be quickly spent on low value items that won’t be appreciated. Give kids cash, but with care.

Does giving cash lack Christmas spirit?

In a 2014 article for, child psychologist Michael Carr-Gregg came out firmly against giving cash for Christmas1. He even went so far as to say it is “without Christmas spirit”. Harsh? We think so. He softened his comments by saying cash gifts that came without education on money management and saving were the main problem. In the same article, consumer expert Christopher Zinn worried that small kids given cash would fritter it away at the shops, buying low value items which would be quickly lost or broken. He was also concerned that kids given cash and left to their own devices wouldn’t understand the value of money. The piece went on to cite research by Roy Morgan on kid’s spending habits. It found that girls liked to spend their money on toys and clothes, while boys preferred console games. Both girls and boys said they would also put gift money in their bank account.

Giving cash avoids disappointment and waste

A British article from The Guardian explores the other side of the argument, coming down strongly in favour of cash gifts as the BEST present you can give to kids. It says giving cash avoids the thousands of unwanted presents given and received every year. No more wrong colours or sizes, no age inappropriate presents and no more dodgy re-gifts. Giving cash removes all possibility of error, making it the best possible present (and it’s easy to post!). The article also favours cash gifts as a prime opportunity to teach kids the value of saving money to buy a larger item2.

Like it or not, giving cash is a growing habit among Australian families. A Roy Morgan survey in 2013 found that 66% of kids aged 6-13 would receive cash for Christmas. That number was up 4% from 2007 and we imagine it’s even higher in 2016. The average amount received was $85, and 38% of kids received $100 or more3. It’s time to accept that cash is a common gift for kids. Instead of complaining about it, focus on providing a sound financial education so they understand how to value it and spend it wisely.

Turning cash gifts into future financial security

We have written an e-book called Money Savvy Habits for Kids4. It’s an easy to read, practical guide to teaching your kids the value of money. It recommends that parents teach kids to have fun with their cash presents and spend a little, but to also actively save for their future. Money put aside each time a child receives cash, invested wisely, can be the price of a car or an airline ticket by the time they’re old enough to appreciate these things.

It even suggests saving a portion of each cash gift until it reaches the minimum price of a share package. Kids can choose which blue chip company to invest in, they can keep an eye on the price and bank the dividends, saving for the next parcel of shares. This is a far more interesting and interactive savings tool than a term deposit or a piggy bank that sits temptingly on the bookshelf. From a young age, kids can be involved in their own financial future. You can teach them exactly how good it feels to reach a saving milestone, or watch the value of their own share portfolio climb.

Teaching your kids about cash and make them financially savvy from a young age Source: Unsplash/Jon Flobrant

Teaching your kids about cash and make them financially savvy from a young age Source: Unsplash/Jon Flobrant

No more guilt, give cash and start their financial education

Giving cash as a Christmas gift should not be a guilt sodden experience. And if you’re a far-away grandparent or other relative, it could be your best option. But even if you live around the corner, cash as a Christmas gift is still ok. Any grumpy teenager will tell you it’s the best kind of gift. So, if you’re the parent (or even the grandparent) of a kid with a wad of Christmas cash, take the opportunity to teach them about money and the importance of saving. Encourage them to save a decent portion of every gift for a future purchase (or just for their future). Just as you must assemble the Barbie dream house or help with the Lego spaceship, you must be involved in how cash gifts are valued, spent and saved. That’s the trick to making cash a successful (and guilt-free) Christmas gift.

Any questions about how to begin your kid’s financial education? We can help. Call Modoras on 1300 888 803.

Over to you

Do you think it’s ok to give kids cash for Christmas? Or do you think it lacks Christmas spirit? Is it ever too early to start educating kids about finance?


1. 9 out of 10 kids receive lazy cash gifts for Christmas – Dec 2014
2. The Guardian: Cash is the best Christmas present for kids – Dec 2014
3. Roy Morgan survey on cash gifts to kids – 2013
Emily Hein- Money Savvy Habits for Kids – eBook

IMPORTANT INFORMATION: This blog has been prepared by Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licences (Number 233209). The information and opinions contained in this presentation is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals' personal circumstances have been taken into consideration for the preparation of this material. Any individual making any investment or borrowing decisions should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to borrow funds or purchase, sell or hold any particular investment. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of, credit contract entered into or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog may change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.


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