The highlights
- If your child is asking for money as a gift, ask questions so you can understand how they want to use the money. When gifting money to kids, the gift should have a purpose that fits with your values.
- Adjust how you gift money—both the amount and way it’s given—according to the child’s age, maturity, experience, and knowledge about money.
- When gifting money to kids, take the opportunity to bundle the gift with lessons about intentional spending, thoughtful charitable giving, and setting and sticking to a budget.
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? Should you?
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.
What should you say when your child asks for money?
If your child puts money on their gift wish list, it may be a sign that they’re ready to learn more about money and get some hands-on experience.
Brian Ford, head of financial wellness at Truist, says you should be clear on what your kid wants to do with the money they’re asking before you make a decision. “It needs to be for a purpose,” he says. So if you don’t already know what your child wants to do with the gift, you should ask. And if your kid doesn’t have a plan for the money, it’s an opportunity to help them come up with one—whether that’s buying something special or saving for something bigger in the future.
Once you decide on a purpose for the gift, you should talk about it so you’re on the same page. And if the money is for a future goal, you can take steps to help safeguard it from being spent in a different way.
“Is it for college? You might set up a 529 education savings plan and then give the money directly to that. Is it for a car? Set up a ‘matching program’ for them, where you give a little extra toward their goal as they save for it or do extra chores,” Ford says.
You can track progress toward any of your child’s long-term savings goals together as a family, whether that’s on a spreadsheet or a hand-crafted pie chart you hang on the refrigerator.
What is the right age to start gifting children money?
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, says Liz Frazier, author of “Beyond Piggy Banks and Lemonade Stands: How to Teach Young Kids About Finance (and They’re Never Too Young).”
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. Frazier and Ford advise splitting any “income” into portions: save, spend, and donate. Some money satisfies that immediate purchase wish, some goes toward a longer-term goal, and some is used to make an impact. Let your kid decide what charity or organization to support.
“It’s not about the end result for kids—it’s about the process,” Frazier says. “My son loves sharks, so we donate his ‘charity’ jar to a shark fund. He’s not going to save the sharks with a few dollars, but it’s about him learning the process of giving. That is hugely impactful in the long run.”
Did you know?
If you’re giving a large monetary gift to an adult child, keep in mind that there’s a limit to how much money you can gift in a year without tax implications. In 2025, that limit is $19,000 per child per parent.Disclosure 1
What are the best ways to give money to kids as a gift?
Cash? Gift card? Digital transfer? Match your method to your child’s age and the purpose of the money. For example, bank accounts or money apps are a good fit for teenagers because they can get in the habit of checking their account online to monitor their balance, fees, and any interest accumulated.
And if you do decide to give money to your kids as a gift, make sure you give them the freedom to use the money, even if that leads to buyer’s remorse or other disappointments.
“Decision-making is a really big part of learning how to manage money, and it’s important for them to make mistakes,” Frazier says. “It’s OK for them to buy something awful, it breaks, and then they learn from that. It’s hard for parents to sit on their hands and allow their kids to do it, but it’s a part of learning to manage their finances, without any consequences.”
The bottom line: Gifting money to your children can be a great chance for them to learn and grow. As far as when and how much to give, every child and family will be a bit different. But when you decide the time is right, you can help them make the most of the opportunity by helping them come up with a plan for how to use the gift.
Next steps
- Before gifting kids money, come up with a plan based on their age and goals. For example, if you want to help them save for college, you could open or contribute to a 529 savings plan. But if you want to help them learn about spending, it may be better to give them cash.
- Look at your budget and determine how gifting money to your kids fits into your spending and long-term goals. Set an annual or monthly amount not to exceed.
- Keep learning about strategies for teaching your kids about money. Read about some of the most important money lessons to teach your kids, or check out our podcast episode on “How to help your kids be good with money.”