4 Ways to Make the Most of a Cash Gift
Cash gifts are the perfect solution for the ones on your list who have it all. More flexible than a gift card, giving cash allows the recipient to make the important decision of how to spend it. Generally regarded as last-minute or impersonal, cash gifts can be a welcome relief among closer, familial relationships. Everyone has an idea for what they would do with an unexpected check or winning lottery ticket, so why not give the freedom of choice?
Cash gifts can open many doors by giving the gift of opportunity. To learn more about how a cash gift can change the financial forecast for your loved one, keep reading.
1. Inspire a Savings Challenge
No one said that a cash gift had a spend-by date! New cashflow can be the catalyst for a savings journey that lasts all year. Try some of the following savings challenges for yourself or your family:
- 52 Week Challenge: For one year, save the dollar amount of the current week. $1 the first week, $2 the second, up to $52 the last. In one year, you'll save $1,378!
- 50/30/20 Rule: Make it your goal to reserve 50% of your income for bills and expenses, 30% on mindful spending, and 20% for savings.
- One Month's Salary: Set aside 10% of your monthly income to have one month's salary in your savings by the end of the year.
- Round Up: Round up your purchases and save your change for savings that grow with every purchase.
- Envelope Challenge: Label 50 envelopes from $1 to $50. Randomly choose one envelope per day and put that amount inside. By the end of the year, you’ll have saved $1,275! For bigger budgets, use 100 envelopes labeled $1 to $100 to save $5,050.
- Weather Challenge: Designate one day per week as your challenge day. On your challenge day (say, Friday), check the forecast. Whatever the high temperature is for that day, set that dollar amount aside. For example, if the high for that day is 98 degrees, set aside $98.
2. Start an Investment Journey
Investment is an important part of everyone's financial toolset that unfortunately gets cast aside in favor of more immediate needs. Help build a loved one's future by giving them the foundation they need to start investing. Whether you give a lump sum or provide the resources to become an investing mogul, your gift will grow over time and provide security. For more ideas, contact our Investment & Retirement Center to make the most of this special gift.
3. Help Pay a High-Priority Debt
Debt relief is a gift that can benefit any recipient. Before giving such a personal gift, be sure to consider whether your recipient will welcome the gesture or feel embarrassed or defensive. If you feel the gift will be accepted, you could be giving a gift that keeps on giving. Besides the initial cash payment, you'll be helping lower interest costs in the long term. Want to figure out exactly how much you'll help save? Use our financial calculators to find out!
4. Accomplish a Dream
Life's major milestones tend to take a lot of cash. Cars, weddings, houses, and more require a significant payment and drain cash reserves quickly. Give memories or practicality by helping fund one of these life events for your loved one. After all, in 2020, the average midsize car cost $25,000 (Kelley Blue Book), the average wedding cost $33,900 (The Knot), and the median home down payment was 12 percent. (Bankrate). Your loved one will appreciate the help!