Let’s say you’re lucky enough to have some spare money, which someone you care about could use. You want to help them out, for no other reason than that they matter to you. They have not requested your help, nor would they dream of doing so. What’s the best, most tactful way of giving them your money? (And we’re talking about giving - no expectation that they’ll pay you back.)
To get specific, imagine the amount is between $5,000 and $10,000. The person you want to help is not in acute financial distress - they have a job and a roof over their head, but they’re mired in debt and the money would make a difference. This person is a close relative or very good friend.
What are the odds the person would just be grateful, accept your gift, and improve their life? Or would such an offer hurt their pride, cause offense, and come between you? Anyone been on either side of this equation, and if so, how did it go? Does the amount of money matter? Should there be an upper limit to your generosity?
Tricky question, because the circumstances are always going to be so different. So I guess all I can offer you is how I would want to be approached, if I were in the position of being the recipient.
I would like the person to speak to me face-to-face, and say something like, ‘I’ve come into some money recently and I’ve been thinking about some good I could do with it. I know you have <financial situation> and I’d like to give you a gift of $x to help you out. I know it’s quite unusual to give money to people, and not everyone is comfortable accepting cash gifts. So have a think about it, and let me know. I’ll send you an email to confirm this, and when you’ve decided, reply to that email and we’ll take it from there.’
One thing you could do is give it for an occasion – a birthday, Father’s Day, Christmas, depending on the appropriate season. You could send/give a card with an enclosed check. That positions the money as a celebratory gift, rather than an act of charity. When thanked and asked about the gift, you could then say, “I just wanted to do something special for you.” I think that any mention of the recipient’s financial situation could be cause for awkwardness and embarassment.
The upper limit to your generosity should be $13,000, the amount you can give to a single individual each year without having to pay gift tax (note that gift tax is paid by the giver, not the recipient).
I’ve seen some friends in the past get family gifts because grandma sold the farm, or Uncle old guy wanted to lighten up his estate before he died.
In one case, the couple put their $20k to fairly good use, paying some debts and finally getting around to finishing their basement (which was a good thing since they were embarking on the whole parenthood project thing).
In another case, rather than paying off debts, the idiot decided it was time to buy a bunch of new toys. :rolleyes:
I received a couple of smaller gifts from my mother during my period of involvency. They all went to paying debts.
So really, it depends on the person on the receiving end. If they like their toys and keep buying new ones despite their debt load, you probably are not going to be happy how they spend the money. Likewise if they’re normally ungrateful bastards, you cannot expect them to be any different in the face of a windfall.
I guess the question I would have would be how close they are and how open they are. If you and they speak honestly and openly about such issues and you know it is a single (or small number of) debt, then perhaps you could say something like;
“Look, I know that credit card debt you have is a bit overwhelming. If it works out for you, would you mind if I made a $5000 payment on it?”
Bring your check and a stamp, have them pull out the bill, put the check in the envelope and the stamp on it, and then take them out for dinner with a side trip to the post office to mail it. Done.
I have to say that Chimera’s posts highlight my concerns. If you want to give the person money because you want them to pay of their debts, then you shouldn’t do it. That would be paternalistic, and trying to run the person’s life, and exactly how a nice gesture turns into something that would hurt their pride, cause offense and come between you.
OTOH, if you want to give the person money because you really like them, have some extra, and want to make them happy, then go ahead and give it as a gift, with absolutely no strings attached. But be prepared that they might go out and buy a motorcycle, or blow it all in Vegas, or do something else you consider inappropriate. Don’t give the money if that would upset you.
Everyone dreams about getting that big check to use however they like. If you can make that happen for someone I think it’s great. But it has to be given freely. I still think an occasion gift is the best way to go.
A gift of $5k or more is very unusual. To try to mask it as a gift of occasion is very awkward.
I think sandra_nz has the best advice, here. Talk to the person in question. Get their approval before dumping a load of cash on them. People differ in their opinions on this kind of thing. It may be welcomed relief, or it may be very personally insulting. Please don’t roll the dice on this type of interaction. You obviously care for this person. Don’t jeopardize your relationship by making guesses. Ask first.
Or they may just go out buying toys on the promise of receiving your money soon. At which point they’ll be insulted and angry if you don’t come through.
If you have the means to help someone you care about, then, do it! What wonderful generosity on your part. I can’t imagine such an offer causing any hard feelings on the part of the recipient. I would hand them a check, say no strings attached & that it something you want to do. If they aren’t able to accept the gift, they simply do not have to cash the check.
The tricky part, to me, is ensuring there are truly no strings attached. Will it bother you if they pull up in a new car the following week? If so, you may need to specify where the funds are applied, or, reconsider altogether.
All very good and interesting advice, even where it’s conflicting - thank you all. It’s a tricky issue.
As a bit of background, for years I was deeply in debt - deep, anyway, compared to my meager income, though nothing terrible compared to the trouble some people get into. I always made monthly payments on my credit card, but what with interest and other expenses there was a stubborn balance that would just never go away - never mind my student loans, still being paid off nearly a decade after graduation. It seemed impossible to get out of the hole, and sometimes I’d lose sleep at night worrying about it.
Flash forward and I’m miraculously in a different job, making more than twice my previous salary with a fraction of my former expenses, debts paid off, money in the bank. Seriously, it’s a life-changer - psychologically, in terms of my life options, my feelings about the future. It feels so good that I want to help out a relative who’s in a similar position to the one I was in not long ago.
The funny thing is that if, during one of those sleepless nights I used to have, a rich uncle had called me up and offered to pay off my credit card, I’m not sure how I would have reacted. I wouldn’t have found it insulting; I’d probably have politely refused, and if he insisted that he meant it and could afford it, I’d have gratefully accepted. But I would probably be wracked with guilt over being bailed out. Would that guilt have lasted for long? Would it make my relationship with said uncle weird? I don’t know.
This is a good question. To be honest, I probably would be a little bothered if the gift were spent on something frivolous instead of on improving their life. But I would swallow that feeling, on the principle that the money was given freely.
Happily, I’m not too worried about that happening - the person in question is responsible and pretty thrifty!
If you can set up an anonymous delivery option, perhaps that would forestall any potential awkwardness between you and your benefactee (beneficiary? I dunno, whatever you call it). Maybe you could set up a small one-time trust and pay an attorney to deliver them a check. I don’t recommend leaving a bag of $100 bills on their doorstep, though
How would you have reacted if during that period a rich uncle had sent you a birthday card that said, “I hope you can make good use of this,” and enclosed a $5000 check? Would you still have felt guiilty?
