In a world of rising inflation and interest rates, is cash a bad gift in 2023?
What about cash equivalents like contributing to a balance the recipient can convert to a gift card?
Considering the potential advantages and disadvantages, and the current economic climate, it is worthwhile to assess if cash is an appropriate gift in 2023.
Let’s consider the benefits and drawbacks associated with this type of gifting. There may be circumstances when giving cash can be an effective way to show appreciation.
In this blog, we’ll explore whether cash, like in past years, remains a taboo gift in 2023. We’ll also provide tips for how best to give cash, as well as alternatives should you decide against using money.
Table of Contents:
Benefits of Giving Cash as a Gift in 2023
Giving cash as a gift in 2023 can have many advantages. But cash isn’t for everyone. In some cases, a cash gift doesn’t make sense for either party — neither the giver or the recipient.
If you think about it, you probably put a fair amount of consideration and thought into non-cash gifts. Cash gifts, likewise, should also be given with thought and consideration.
Factors to consider include:
- Reason for the gift
- Circumstances of the person receiving the gift
- Personality of the recipient
- Any cultural or contextual norms that a cash gift might violate.
When to Give Cash as a Gift
If money is, or could be, tight for the recipient, cash might just be the best thing.
Cash is the only gift that has 100% utility for the recipient because it is universally useful. It provides the recipient with the freedom to decide what they would like to purchase.
Cash can be especially useful for potential recipients that might be under the 2023 strains of high inflation, prices, and interest rates.
Teachers, coaches, and front-line workers typically don’t earn a lot of income for their time and effort, so the extra money will likely be really appreciated.
Having trouble determining if cash is truly okay to give in your specific situation? Here’s what to do.
Compare the utility of cash to other gift categories. Then, ask yourself if the item you are considering is truly useful to the recipient.
If a non-cash gift idea is just as useful to the recipient, move forward with that choice. If you think that the non-cash gift wouldn’t offer the recipient the same use, give cash instead.
Overall, giving cash as a gift in 2023 has its advantages. It can be an appropriate choice depending on the situation.
Nevertheless, prior to selecting money as a present in 2023, you need to consider the recipient.
Would cash truly make a difference in their lives? If so, then a cash gift is not only appropriate, but the perfect way to express your appreciation.
Considerations When Giving Cash as a Gift in 2023
If you’ve decided to give cash as a gift, you might be wondering how much money to give.
Consider the specific occasion and your relationship with the recipient.
Let’s say you’re putting together a cash gift for a teacher or coach. In this case, $20-50 is suitable, depending on their role and how much they have done for your family.
Giving more money as a gift may be suitable for someone who has done a lot for you or another person.
For example, for a teacher who spends almost every day with a high amount of contact with your child, $50 in cash is appropriate.
Conversely, there may be a teacher’s aide. If the teacher’s aide assists with classroom tasks, but doesn’t have as much contact with your child $20-25 is appropriate.
Be sure to note. If you are gifting to a coach or a teacher, there might be limitations or rules imposed by the organization that the person is associated with.
Noting any rules and policies about cash gifts are important. But in general, you really don’t need to worry about potential tax implications when giving cash gifts in 2023.
The federal limit before any gift tax reporting requirement kicks in is $17,000. If you are in that territory of gift, send me an email or text – we should friends 😉
Additional Contextual Considerations for Cash Gifts
Again, always return to the gift’s context when giving cash as a present in 2023. Ask yourself the following questions:
- Is the recipient comfortable receiving money?
- Will they feel awkward about accepting such a cash gesture?
- Are there any “implied” or unspoken rules in your organization about giving cash gifts?
When giving any gift, especially cash, your top priority must be the comfort and happiness of the recipient.
If you’re unsure if a cash gift will make your recipient uncomfortable, choose another gift.
How to Give Cash as a Gift in 2023
The best way to deliver cash as a gift? Couple it with a sincere message expressing why you are grateful for the relationship.
A heartfelt message can make all the difference in landing a good gift well.
Next, as discussed above, think about the context of the relationship.
Context is a matter of how well you know an individual, their preferences, and behaviors.
When gifting cash, an important context is for what and where the recipient makes purchases. Why is this important? Because you could offer a cash equivalent, such as a gift card instead of cash.
Alternatives to Giving Cash as a Gift in 2023
If you feel uncomfortable giving cash, even if it suits the recipient and occasion, consider giving a gift card.
Gift cards are great. They offer a similar utility as cash without requiring as much hemming and hawing as a cash gift might.
Gift Card Recommendations
When selecting a gift card, choose one from a universally useful retailer. Use these considerations to guide your purchase:
- Costco, Target, Walmart, and similar retailers. Everyone needs to stock their home with basics. This includes food, soap, toilet paper, and detergents, etc. Gift cards to places that hit the core of a person’s needs likely have best chance of being so appreciated by the recipient.
- Restaurants. Restaurant gift cards make great cash equivalent gifts. However, they’re only valuable to the recipients if know, for example, that like to take their partner on date nights, and you know their favorite restaurant.
The point is to take a moment and reflect on your recipients. What do you know about them? What type of gift card aligns with their likes, personality, and lifestyle?
How to Make the Cash Gift v. Non-Cash Gift Decision Easier
Maybe you struggle with what gift card to give and are uncomfortable with cash. In that case, you can also contribute money to a balance that the recipient can convert into a gift card.
This is where The Appreciation Company comes in.
We work amazingly well in the scenario where you want to do something heartfelt and deeply meaningful yet would prefer to offer the recipient of the gift the choice of how they redeem it.
Our service can be used both to offer the recipient an individual gift and for the coordination of a group gift.
In the group gifting scenario, you’ll invite other contributors to offer notes to the recipient and contribute to the balance of the gift.
The group-gift scenario opens a whole new possibility where a group of individuals could offer a cash equivalent in the form of a balance.
Our approach reduces the discomfort of one individual offering cash. In a group, cash gifts are typically accepted without hesitation across various contexts, cultures, and work or friend relationships.
Recap of Pros and Cons of Giving Cash in 2023
To answer the question: Is Cash a bad gift in 2023?
The answer is a qualified NO.
In other words, it depends on the giver and the context you have with the recipient.
Giving cash as a gift might be a trending thing in 2023, given the economic climate.
Depending on the situation, it may be the most thoughtful and practical option for some recipients.
When considering whether to give cash or an alternative form of gifting in 2023, consider your budget and what would best suit the recipient’s needs.