Holiday money: Spend it or save it?

While some people think that it’s crass to give gift cards or cash as presents, I’m just fine with it. A gift card can show thought just as much as any other gift, especially if you know what the person likes and can give a gift card to a store that they like.

And if you’re of the opinion that gift cards are good, then cash is even better. It’s the most fungible of gifts. There’s very little that’s locked in about what you can buy with cash (except the country or countries that accept that particular form of cash, of course).

Any money burning in your pocket is self-ignited

Along with the ability to spend gift money on whatever you choose, is the ability to not spend it. That’s what we do with our paychecks, right? We budget (or not!), and we decide to spend or save.

We don’t have to spend gift money. We can decide that we don’t need to buy something with gift money. In some ways, a bit of extra cushion in a savings account is a gift: we can sleep a little easier because a future doctor’s visit or a future car repair is paid for.

In the end, a gift of money is a windfall, and it pays to be wise with it. Windfall money tends to burn a little hotter in the pocket, but only because we let it.

Here are a few things to consider when deciding what to do with a cash gift:

  • If you were to buy something, what would you buy? Will these things be covered by the gift, or will there be additional, ongoing costs associated with the purchase? Go through the same process that you would if you were spending money that you had earned.
  • If you decide not to buy anything now, what would the money do in the meantime? Will it add to a savings account, or will it go towards a debt?
  • What would the giver want you to do with it? In the end, of course, the money was a gift, so the money is literally (and figuratively) out of the giver’s hands. But it also is wise to consider at least a little what the giver would think of what you bought (or didn’t buy). There’s a good chance that they’ll ask, or would want to know. Would you be comfortable telling them?

Any other things to consider? Leave them in the comments!

John Wedding

Husband. Father. Web publisher. Musician. John has blogged at Mighty Bargain Hunter since 2005, helping people to recognize life's good deals.

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Comments

  1. says

    First of all, you should ask after the gift you have given. It is up to the people what they do with it. Secondly, I prefer giving cash to especially children. They are counting on getting some presents or money so that they can buy what they want. You should separate what you are going to spend and what you are going to save. This way, you won’t feel guilty when you are spending from the allocated money knowing that your savings are separate.

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