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Giving Money As A Gift

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    Giving Money As A Gift

    While many people have the impression that giving money as a gift is inappropriate, the truth is that money can be one of the most flexible gifts you can give and it allows the recipient to use the gift in exactly the way they want. If you aren't sure what to give someone, a gift of cash will likely be much more appreciated than a guess at a gift that will have a good chance of never being used. With a little imagination and common sense, money can be one of the best and least expensive gifts to give.

    There are some steps you can take to let the recipient know that the gift of money was a well thought through decision and not a last minute default gift. When giving cash, make sure that you express what you would like the person to do with the money. Whether they do or don't use it for that purpose is beside the point. It shows that you thought about the gift and didn't just whip some money into an envelope because you didn't have time for that person. A short note such as "Please use this for that dress you have always been talking about getting" or "This is to help expand your ever growing CD collection" shows that you had a specific gift in mind that you knew the recipient would like, but weren't sure of the exact one to get for him or her.

    If the gift is under $100, in most instances it is best to go for cash, but not just any old cash. Take the time to go to the bank and make sure the bills are crisply new. A brand new bank note instantly says that you made an effort on the gift since new bank notes are not normally found in your wallet or purse. The best part is that this effort won't cost you anything. You can switch old bills for new ones at virtually any bank for nothing.

    For kids, cash can be a doubly fun gift to receive. The money in itself is highly prized since they still are not earning money on their own, not to mention what it could possibly purchase. While it is unlikely that an adult receiving money as a gift will count it over and over again, you can be sure that a child will spend hours doing this, so it's a good idea to go for quantity. Ten crisp $1 bills can be counted over and over again whereas one $10 bill can't. For older children, go for uniqueness. A bunch of new $2 bills or a $50 bill are currency that aren't usually seen in daily transactions and give them a uniqueness that adds to the gift.

    If you are on a tight budget, you can even give coins as a gift. Find a penny, nickel, dime and quarter for each year since the day they were born. They will spend hours lining up the dates since they were born in countless ways. You also have an easy and automatic add-on-gift every year thereafter by giving the newest year's coins if you so desire. For older kids, an uncirculated or proof set of coins from the US Mint can be a wonderful gift.

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    Another good gift for younger kids is an actual savings account. You can begin to teach them at a young age the value of saving. Open a no fee account and present them the bank book with a few bills. You can then take them to the bank branch to show them how to deposit and take out money.

    When giving the money in person, cash is probably better, there are times when a check or traveller's cheques may be more appropriate. Sending cash through the mail entails risks and you will not get any reimbursement if the mail gets lost. The risks are compounded when sending cash to a foreign country. In these cases, a check or traveller's cheques are an acceptable alternative. Just be aware that cashing a check can be quite costly for people that do not have a checking account or other type of bank account.

    In some instances, cash will probably seem inappropriate as when giving a small gift to a teacher. In these cases a gift certificate may be more appropriate. The main problem with gift certificates is that if they are store specific, the recipient must choose something from that specific store. You can avoid this problem by using a place like which will allow the gift recipient a choice of about 300 places to shop. The drawback is there is a fee for this service. It also means that you are giving the store a loan of your money until the certificate is redeemed. Still, in certain circumstances, it's the best alternative.

    Another form of money gift that is growing in popularity is prepaid plastic gift cards. These are issued by Visa and MasterCard which look and preform basically like credit cards. When you purchase these for someone, you determine the amount that the card will be worth by placing that amount onto the card and then the recipient can use the card at anyplace that accepts these branded cards to buy what they would like.

    While these are gaining in popularity, they are also probably the worst choice you can make when giving money as a gift. Many of them come with a variety of fees that make them less than appealing. There is usually a time limit on when the money has to be spent before incurring more fees or losing all the amount on the card. Some people like the idea because they feel these prepaid cards are safer than cash. This is a false assumption, however, since the prepaid cards by Visa and MasterCard are covered under zero-liability policies so that if the card is lost or stolen you're out of luck.

    There are also other ways that you can give money that can also encourage saving and investing. US Savings bonds are available for as low as $25 and are backed by the U.S. government, offer competitive rates and there are tax breaks (you won't pay state or local income tax on the interest your bonds earn and on Federal taxes, the interest compounds tax-deferred until the bonds are redeemed). These encourage saving in that they can't be redeemed for a year from the time they are purchased, but it also means if the recipient wants the cash right away for something, they are out of luck.

    US Savings Bonds can be purchased at most banks and credit unions. The delivery of the bond takes about three weeks, but many banks will offer a certificate which can be presented letting the recipient know the bond is on its way. One potential problem with this gift is that a social security number is required to purchase the bond so you will need to know the recipient's social security number to have it placed in their name. If you don't know their social security number, you can use your own. You won't incur any tax liability as the number is used for tracking purposes in the event the savings bond is lost, stolen or destroyed. Your social security number will appear on the bond, however, and you will have to decide whether you want the recipient to know that information of yours.

    Another great money gift for children of any age is to purchase stock in any company they know well. Simply find out what their favorite current toys are and purchase a share in one or more of those companies. This will allow the recipient to follow the price of the stock and learn how the stock market works with a tangible piece of the company. You can get single shares of stock framed from such companies as You might also consider purchasing into an index fund for the child as a gift although this will cost a bit more. This will let them follow the ups and downs of the stock market and know they have a part of it.

    Whatever gift you ultimately choose, money can be a great gift that can be appreciated by anyone as well as used as an educational tool for younger children. Choose wisely for your particular recipient and it will surely bring a smile to their face no matter the age. That is one thing you can't say that about a lot of gifts out there.

    A couple months ago - just for kicks, I traded my change in for $90.00 worth of brand new, sequential $2.00 bills, pressed them between 2 boards, and coated the top edge with rubber cement. When I needed to buy a cup of coffee or make some other small purchase, I would tear a couple off the pad. People thought it was cute; but the Chinese clerks were stunned - they did not know you could get fresh, crisp bills for their holiday giving.

    This might be a gift idea for people of a certain age.
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