Hanukkah gelt refers to either money given as a gift on Hanukkah, or more commonly today, to a coin shaped piece of chocolate. Usually the chocolate coin is wrapped in gold or silver foil and given to children in small mesh bags on Hanukkah.
History of Hanukkah Gelt
The word "gelt" is actually the Yiddish word for money. It's unclear when the tradition of giving children money on Hanukkah began and there are several competing theories. The most likely source for the tradition comes from the Hebrew word for Hanukkah. Hanukkah is linguistically connected to the Hebrew word for education, hinnukh, which led many Jews to associate the holiday with Jewish learning. In late medieval Europe it became a tradition for families to give their children gelt (money) to give to the local Jewish teacher on Hanukkah as a gift to show appreciation for education. Eventually it became customary to give coins to the children as well to encourage their Jewish studies.
Hanukkah Gelt Today
Many families continue to give their children actual monetary "gelt" as part of their Hanukkah celebrations today. Generally children are encouraged to donate this money to a charity as an act of tzedakah to teach them about the importance of giving to those in need.
In the early 20th century an American chocolatier came up with the idea of making coin shaped pieces of chocolate wrapped in gold or silver foil as Hanukkah gelt to give to children, chocolate being a more appropriate gift than money, especially for small children. Today chocolate gelt is given to children of all ages throughout the Hanukkah celebration. When it is not eaten outright, children also use chocolate Hanukkah gelt to play dreidel.