How Should You Handle Cash Gifts When You’re Broke? 

How to Handle a Cash Gift If You're Broke

If you were lucky this Christmas, you likely got a variety of Christmas gifts, perhaps including cash. However, if you sometimes need to ask others for financial help, how should you handle cash gifts when you’re broke? You have several responsible options.

Ask the Giver How They Intend the Gift to Be Used

If you know the gift giver well, the easiest solution is to ask how she intends the money to be used. She may tell you the money is for you to splurge on yourself while you’re going through hard times. Or, she may advise you the money is to help you make ends meet. Whatever she tells you the money is for, use the money in the way that she has suggested to avoid hard feelings.

I recently watched an old episode of Everybody Loves Raymond where Robert was struggling financially. Debra gave Robert a hefty check as a gift to help him out. However, she and Raymond were upset and appalled when they learn Robert planned to use that money not for living expenses, but for a trip to Vegas.

When you ask the gift giver how they want you to use the gift, you avoid this type of situation.

Put Most Toward Bills and Splurge with a Small Amount

If you don’t feel comfortable asking the gift giver, a different option is to spend a small portion of the money, say five or ten percent, on yourself. Then, funnel all the rest toward bills.

This is a smart option because you do get to treat yourself in a small way, but you’re being mostly responsible with the money. This allows you to take care of your long-term needs.

Pull All the Money Toward Bills

A prudent option is to put all of the money toward upcoming bills. This is the least fun option.

However, many times, when people are struggling financially, they tend to think their situation won’t change and that they will always struggle financially. That is not true. Instead, remind yourself that you’re only temporarily in a difficult financial situation, and the more responsible you can be with your money, the faster you’ll get out of this tight financial bind. Isn’t that the best gift you can give yourself?

Save It for Desperate Times

How to Handle Cash Gifts When You're Broke
Photo by Maria Lin Kim on Unsplash

Another way to make the most of the money is to save it for hard times. Maybe you have enough money to pay your bills now. You can put the gift money in an account earmarked Christmas 2021 Gift Money. Then, for example, if this upcoming spring you don’t get enough hours at work, you won’t have enough money to buy food for the week. You’ll be glad you saved your gift money so you can buy food for the week with it instead of having to borrow money from a friend or relative.

On the positive side, if you save the money all year and don’t need it, you can use it at the end of the year how you wish—to splurge or get ahead on your finances.

Final Thoughts

How should you handle cash gifts when you’re broke? There’s no right or wrong way. The best you can do is ask the gift giver how she would like you to spend the money. If you don’t feel comfortable asking, you may want to invest in yourself rather than blowing the money. This will help you get out of your difficult financial situation faster.

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