A complete guide to gifting money to children on birthdays, Christmas or any other occasion

You might not be able to predict and procure this season’s hottest new toy or game, but you can rely on one, perennial present choice: cash. Gifting money to children on their birthday, at Christmas, in return for good behaviour or for outstanding grades is a great way to show your appreciation.

Children appreciate the flexibility of money, since they can buy something they truly want, or to put towards saving for a bigger purchase. Money gifts can help when it comes to teaching children about money.

Teaching children about money is an important task, and research indicates that good personal finance skills are best established young.

However, you may wonder how much to give, when to give it, and how other siblings or adults will react to your cash gift.

You also might worry about the best, safest, and most effective way to get that money over to the child in question.

Don’t worry, we’ve got you covered. If your son, daughter, niece, nephew, grandchildren, godchildren or, indeed, any young gift recipient on your list, you can gift money to them simply and easily. Here’s what you need to think about…

Kids almost always appreciate a generous grandparent, on birthdays, at Christmas, or indeed any other time. However, generous grandmas and grandpas may want to check in with parents about the amount you’re giving, before you shoot the cash over.

Children have a strong sense of fairness, siblings often find out how much a brother or sister has received, and parents or guardians may want to make sure the amount given isn’t out-of-line with what other children are receiving from other sources.

And, if you’re looking for guidance as to how much you should give, take a look at how much other parents are giving.

Don’t be afraid of spoiling your relatives. According to our Pocket Money Index , aunts and uncles have slightly overtaken grandparents as the most generous gifters – averaging £23.81 in special occasion handouts compared to grandparents (£23.60).

So whoever you’re gifting money to, just remember, again, that children are deeply aware of perceived favouritism, so try to keep the amount you give to kids equal and proportionate.

This is perhaps more straightforward, as most parents on Rooster Money are heavily involved with their kids’ finances. However, if you do set a birthday or Christmas budget, be careful to not offer it all as a cash gift. You’ll probably want to keep some money back for small gifts on the day, to keep the big day feeling special.

Things can get more complicated if parents are separated, divorced, or if there are step-parents or other guardians involved. Again, communication is the key here. Make sure you discuss the right amount to gift, so as a special moment for a child doesn’t lead to conflict among the adults.

Brothers and sisters giving money to one another is a little more tricky. It might be more fun to encourage siblings to buy each other a gift. However, if they are keen on giving money as a gift, you can transfer money from their own account back into the parent account, then you transfer the money over to their brother or sister, fairly easily.

Try to avoid siblings offering each other loans, however. The terms can be hard to police and difficult to agree on. If anyone offers the kids an advance on pocket money or a loan, it should probably be a parent.

It’s super-easy to gift Christmas money via Rooster Money. We’ve got a full guide here.. Remember you can set up the gift to appear on Christmas Day via IFTTT, or you can do it manually, via the app.

If you’ve decided on a Christmas budget, maybe don’t blow it all on cash, as it’s nice for kids to have something to open on Christmas Day.

And remember, with the Rooster Money app you can include a message with every boost into a child’s account, so you can personalise any transfers.

Be careful paying for good grades, at least when it comes to young children. We go into this subject in depth in our guide to end of year reports; plenty of studies suggest that natural curiosity, rather than the prospect of extra cash, is the best motivator for young learners. Indeed, some experts believe that paying for grades may actually lower a child’s motivation.

There are few exceptions to this guidance, however. Money incentives can help if there’s something a child really finds hard to get naturally motivated about (maybe they find times tables very hard, for example). You know your kid; just remember, more money doesn’t always equal better school results.

Again, natural motivation trumps financial incentives here. However, if there is one task a child finds particularly difficult (such as eating properly with a knife and fork, or tying their shoe laces) you could offer a simple gift of money in return for better behaviour in this regard.

Again, IFTTT enables you to schedule a special birthday boost. You can also do this on the day, which means you’re less likely to miss the big day.

If the birthday girl or boy is saving up for something special, you can get them to set up a Goals pot in their Rooster Money app.

And how much should you give? Well, according to our latest Pocket Money Index, Rooster Money children received on average £46.23 for their birthday.

Postal services such as the Royal Mail don’t prohibit posting cash, and some people like giving money to children this way, though the Royal Mail does recommend using one of their special delivery services, which cost a bit more than posting a normal letter and may require signature.
Cheques are nice to send too, but many banks are cutting back on their cheque facilities, which makes it a bit harder to turn those cheques into spending money. We think there’s a better way…

You can send money to children quickly and safely, and you can add messages that they will see on their phones. The children need to have a Rooster Card, our debit card. Once they’ve got that, money transfers are easy….

With the Rooster Card, you can send money to your kids quickly and safely. Plus, you can set up spending controls, get instant notifications whenever they spend, and choose whether they can use the card in stores, online, or at ATMs. To top up the Rooster Card…

With the Rooster Card, every child’s account is linked to a Parent Account, and every Parent Account has a sort code and an account number. Those with access to the Parent Account can find the sort code and account number by tapping on the Parent Account at the top of the app’s home screen. 

You can also copy the account number and sort code to your device’s clipboard by tapping on the button to the right of the numbers. You can then share it with contacts via text, email or other messaging applications, such as WhatsApp.

Once you’ve got the account number and sort code, you’re ready to send money to the Rooster Money account. Simply move the money over from your bank account. Anyone can transfer money into a Parent Account, and most providers allow you to add a message, so the Parent Account holder knows what the money is for. 

This can be done on the big day, or beforehand. Parent Account holders can choose to add the money as a boost to the child’s Spend, Save or Give Pot, depending on the nature of the gift.

With the Rooster Card, not only will you be able to transfer money directly into the children’s accounts, you’ll also be able to check balances, and create and approve goals and chores. To find out more about all the things kids can do with Rooster Money and a Rooster Card, go here.

Rooster Money works with IFTTT, the smart service that connects lots of apps together. You can use iIFTT to schedule a boost to be delivered as your child’s gift money on the big day, automatically, so you don’t have to wake up as early and fiddle with your phone. Find out more here.

For further advice on children’s personal finance try our top tips to teach kids the value of money

Interested in money and chores? We’ve got that covered too here and here.

For more gift ideas, try our guide to fun educational gift ideas and as well as this list of gift ideas to build financial literacy in kids.

You can also read all about parental tech controls, online spending and scams here, and get some top tips to teach kids the value of money here.