Written by: Chad Zollinger | Best Company Editorial Team
Last Updated: August 13th, 2020
I'm not being dramatic when I say that the only things more difficult than choosing the perfect gift is giving birth or trying to peel a mango with wet hands.
On a more serious note, buying the right gift is even more difficult when you’re doing it for those who desperately need money.
Is it better to just give money to those struggling through a financial crisis? Are there gifts that can help someone on their path to financial freedom? Would it be rude to give a gift that draws attention to someone’s financial situation?
I decided to ask a network of financial experts for some advice on the best gifts for friends and family who are struggling financially.
Should I give money as a gift?
The majority of financial experts I questioned (about 95 percent) did not like the idea of giving struggling debtors cash as a holiday gift. Instead, they suggested books on finance, financial wellness programs, and budgeting tools.
This bothered me a little bit. Yes, their arguments do make sense — giving money to someone who needs it may play into the “give a man a fish, feed him for a day” philosophy. But, the holidays should have some hint of happiness other than “well, time to get to work you poor, unfortunate soul.”
I prefer compromises between a stack of books on finance and $100 cash. However, the gift should match the person who receives it. You must answer one question: does the person you’re shopping for need money, financial education, or simple, sincere emotional support?
I’ve split this article, and the gift ideas, into three separate categories: Money-Centric Gifts, Education-Centric Gifts, and Support-Centric Gifts.
Cash-centric gifts are all about giving the person what they want most. Education-centric gifts are about “teaching a man to fish, feed him forever.” And finally — my favorite type of gift for the financially oppressed — support-centric gifts provide a balm to the stresses of poverty.
When viewed in these categories, you can see why experts would prefer education and family would prefer support.
1. Better spending with an AegisFS prepaid debit card
Jim Angleton, President of Aegis FinServ Corp.
The beauty of this card is that it allows for monitored spending — perfect for parents who want to keep an eye on their kid’s spending habits while they’re away at college. You would most likely only want to gift this to a close relative or one of your children.
“AegisFS is a prepaid and debit card company and provides cash conveyance cards plus spending programs for students, financially strapped individuals and struggling business startups.
We offer a very good prepaid debit card that can be used as a gift card or cash card. We routinely see parents who have irresponsible students in college provide these cards. It allows them to view the account balances, spending, and pie-chart showing where their money goes. Additionally we allow “topping-off” which essentially credits the card with more money. Homeless people are often provided these same cards from charities and place a certain amount but add restrictions whereby you cannot use the card for alcohol, baseless food snacks or beer/wine or non-medical items.
What this does is allow someone the opportunity to manage their money better and see online, via 800 phone number for free, their balances. We also offer SMS or text messages too. When you have cash in hand you act differently. When you have a card that is restrictive, has other eyes watching it, or requires reloading the card, it tempers that individual to spend prudently.”
2. Stocks instead of stockings — teach a man to fish
Dustyn Ferguson, Founder of Dime Will Tell
“If someone is in debt and is struggling to get out, it might be because they are simply bad with finances. Giving them straight up cash or even gift cards may not be the best of help as it could be gone within a day without any positive impact on tackling their debt. It's sort of like give them a fish they'll eat for a day, teach them how and they'll eat for a lifetime. We want to help teach, or at least guide them, to fish for themselves.
How can this be done?
By setting them up for financial success. Buy them a year’s subscription to a service that saves them money or helps them manage it (like Mint). Or buy them stocks, bonds, or money in a CD so they can watch it grow and maybe, just maybe, they'll get inspired to add to it themselves and start their journey to a better financial future for themselves.”
Could you expand on the idea behind stocks/bonds/CD?
“Being at ground zero can seem insurmountable. Being at negative ground zero is even worse. Gifting some sort of financial asset, like a stock or bond, gives them that first momentum upwards. Although they could easily sell it for cash, the hope is that it would be like selling a gift they received, which most people don't do. Instead, they'll passively see it grow and have a portfolio started, which is is often the hardest part. It might not help and they could sell it off and buy something with the money, but in the chance it sparks an ambition to grow their portfolio — that makes the gift invaluable.”
What do you think the best subscription gift would be?
My favorite subscription I'd gift to someone with no strong financial basis would probably be Acorns. It invests your spare change and is only a couple of dollars per month. It makes for a great gift that won't break the bank and can really prove to be useful for whoever receives the gift.
3. Pay off one small debt for them
Nathalie Noisette, Founder of Credit Conversion
“One of my top gift ideas for someone in debt is to pay off a debt for them. Being burdened by debt can be very stressful. If you can relieve someone of one debt (you can afford) I'm sure they would be extremely appreciative. I would advise against giving money. The money may not go to the debt and may be spent elsewhere.”
4. Bookkeeping tools, perspective, and support
Dock David Treece, Senior Financial Analyst at FitSmallBusiness.com
“If you want to give someone a tool to help them with their finances, start with a bookkeeping tool like Quicken. Quicken allows you to track all of your income and expenses so you can see where every penny goes each month. By tracking and reviewing your expenses, you can see quickly how you may need to change spending patterns to help stop the bleeding."
5. Dave Ramsey’s The Total Money Makeover
Ashley Patrick, Founder of Budgets Made Easy
“The number one gift I give people is a copy of Dave Ramsey's book The Total Money Makeover. If they are already working the plan, I like to give gift cards for something they want but won't buy for themselves at the moment.
This book motivated me to pay off $45,000 in 17 months while working as a police officer.”
What’s the most important financial lesson you learned from this book?
“The best thing I learned from the book was the knowledge that being debt-free is possible. I had never thought it was an option or possibility before.”
6. Subscription to Dave Ramsey’s “Financial Peace” course
Danielle Kunkle Roberts, Co-Founder of Boomer Benefits
“Oftentimes those who are in a lot of debt have a bad relationship with money. With that, giving money to a person in debt to try to solve the problem isn’t likely to solve the larger problem.
Those who struggle with budgeting money need guidance and a plan. Dave Ramsey is well-known in this space for laying out a very straightforward plan to help people get and stay out of debt.
Rather than handing out cash, opt to give your friend or family member a paid membership to a financial course such as Dave Ramsey’s “Financial Peace.” This small cost (around $99) to you could be a huge answer to their financial health. (There are many others as well, such as regular investment advice from the Motley Fool, etc, depending on how much you want to spend)”
7. Your Money or Your Life by Dave Ramsey and 3-month Audible subscription
R.J. Weiss, Certified Financial Planner and Founder of The Ways to Wealth
“A great way to help someone long term really change their behavior is with information. I've given books, mainly Dave Ramsey's Total Money Makeover and/or Your Money or Your Life. If I know they won't read, I've given a 3-month Audible subscription with a list of books I think can help the person the most. ”
8. Pay for college finance course or seminar
Megan Robinson, Financial and Behavioral Money Coach for Dollar Sprout
“The best gift you can give someone in debt is the knowledge and resources to improve their situation. That could be in the form of paper or audio books, or it could be some other form of education. For example, you may gift them the experience of attending an in-person seminar or pay for a class at a local college.”
9. No-gift agreement or utility bill payment
Holly Wolf, Director of Customer Engagement at SOLO Laboratories
“Give permission not to give gifts. Some people feel obligated to buy a gift to reciprocate. Suggest NO gift giving to anyone in your family. Absolutely nothing. Then if you decide to pay a utility bill — that's the gift and it feels like one. Plus there's none of that awkward exchange, where you hand them something and they feel bad because they aren't giving a gift.”
“Pay a utility bill. My favorite is putting money on a utility bill or prepaying for X gals of fuel oil. This gives you insight into the problem. Some people are upset that you did that vs. a gift card. It's usually because they want to shop/spend. If you REALLY want to get out of debt, you'd look at it as two months’ expense that you can put on another expense. ”
10. Consultations and debt repayment charts
Amanda Amezcua, Personal Finance Writer for Debt Reduction Services
“Consider gifting a personal finance tool kit with a variety of worksheets for budgeting, saving, and debt repayment, a stack of finance books, or even a debt repayment coloring chart (they’ve been trending this year)! You might take it a step further and cover the cost of consultation with a financial planner — though nonprofit credit counseling agencies provide much of the same advice for free.
Debt is a sensitive subject, so what you give and how or when you present it should be guided by the level of closeness you’ve established with those you’re giving to.”
11. Smart gifting for the financially stressed
Natasha Knox, Certified Financial Planner for PaxPlanning
“The best gifts depend on the debts and how they were acquired (overspending, versus some unforeseeable life tragedy that couldn’t be insured against or planned for), and depends on your own personal financial situation and ability to help.
If it’s a friend — particularly one who struggles with overspending, sometimes the best gifts can be the gift of quality time together, in a fun, but inexpensive or free setting. Maybe establish a no-gifts rule this year, so they don’t feel obliged to give you something, and invite them over for a barbecue, a picnic, or a board games night, or movie marathon.
Something that can satisfy the need for connection and fun, but doesn’t cost them anything, or place them in a position of feeling like they have to reciprocate with something that costs money.”
How would you gift to someone suffering from a tragedy?
“I think that the best gift is real support that is well organized and long lasting.
What that could look like is reaching out to your network of people on their behalf, and speaking to key contacts and experts to connect them with resources and organizations that can help. It could be organizing a meal chain (where a bunch of people commit to cooking and delivering meal that can be put in the freezer or fridge) on their behalf.
Child care is a huge one — organizing a rotation schedule of child care among trusted friends and family, orchestrating a community of people to help rebuild or repair. Maybe it means offering them a place to stay if the situation is so dire that they’ve lost their home.
The connecting thread in all of these is emotional support and community. So often, when people hear of a tragic situation, they will say, ‘Please let me know if I can help’, but the person suffering doesn’t reach out.
A friend reaching out on their behalf to unite the community, taking people up on their sentiment of wanting to help, and letting them know exactly how and when they can help is an incredible gift.”
12. Add as an authorized user on a credit card
RJ Mansfield, Author of Debt Assassin: A Black Ops Guide to Cleaning Up Your Credit
“Assuming the gifter has good credit, the best gift you could give them would be putting them on a credit card or two or three as an "Authorized User."
Of course, you don't give them the credit card to use but just adding them as an AU will help them establish and/or re-establish credit.
There is no downside to being an AU as the authorized user is never obligated to make payments even were the primary cardholder to stop paying or die.”
13. Cosign on a loan
Jacob Dayan, CEO and Co-Founder of Community Tax
“The most creative way to gift someone who is debt is offering to cosign with them for any loan that they need help obtaining.
There is an immense amount of relief that is given to the borrower when they have a cosigner signing with them. The borrower’s interest rate on the loan will drop significantly from when applying for a loan themselves.
Also, offering to be a cosigner with someone allows for a more likely chance to get approved for a loan.
This is a gift that also keeps on giving; a cosigner can arrange for themselves to be released from the cosigning responsibilities after a certain point. Most lenders will advise borrowers to not take this option, but it doesn’t hurt to request this option.
Cosigning with someone in debt is risky, but it will help them out substantially in the long run. Potential cosigners should set up a strict payment schedule with their borrowers. People offering to cosign with should be invested enough to set up email notifications to know that payments have been paid on time.
Along with requesting to be relieved of the cosigning duties, be sure that the loan can then be refinanced entirely under the borrower’s name.”
14. Airo Health: An anxiety-tracking wristband
Maryam Jahed, Founder and COO of Airo Health
“What's a common experience between everyone with debt? STRESS! What happens when you're stressed? You make bad decisions that make the situation even worse for you. When you're in debt, all your focus is on how to get out of the situation which leads to you forgetting to take care of yourself.”
Together, the Airo Health app and wristband is “a product that helps you keep yourself in check, so no matter what you're doing, you're keeping a clear mind. It catches you when you're having the spiral of negative thoughts that start with ‘I owe my friend some money’ to ‘I'm going to die alone!’”
“Airo sits on your wrist and tracks your anxiety. It is like a therapist following you everywhere you go and making sure you know when anxiety is starting to take over. This is important because only then you know when exactly to practice your coping mechanisms.
Airo let's you stay on top of yourself so you know when it's time to push yourself or when to take a step back.”