Thursday, December 22, 2016

Treating gift cards like cash

I've heard this phrase before, but always applied that to the logic of keeping the gift cards in safe & secure place to avoid losing them, which I've been good about doing. However, I was reading another financial blog a few days ago (the name escapes me, so apologies if it was yours!) & the blogger mentioned that she no longer bought gift cards on discount, because she didn't treat them like cash. For example, if she had a Subway gift card, she'd be much more likely to suggest lunch at Subway, feel like she could splurge more often, and potentially spend more than she normally would have. I thought this was an interesting observation and admit that I'm sometimes guilty of this as well.

So, I challenged myself to come up with ways where I will really treat those gift cards I have laying around (mostly purchased at a discount over the holidays) as true cash in my budget. Here's what I've decided. I'll inventory all of my existing gift cards for 2017, and then deduct that value from each category in the 2017 budget. If I have $100 of clothing store gift cards, I'll deduct $100 from the yearly clothing budget. This way, I'll be heavily incented to make the most of each gift card & save them for the right occasions! :-)

Here is my current inventory of gift cards, by category. And, to challenge my premise that I was previously managing my gift cards "like cash", while I was cleaning out my "gift card" envelope, I found two Starbucks cards. Convincing myself that I'd already transferred them onto my app, I was about to throw them both out. However, I decided to take the 30 seconds to add them & see what happens. . . One had $20 on it.

Dining out:
Starbucks (on my app) - $32
Subway gift cards - $50
Panera gift cards - $50

Target gift cards for kids birthdays - $45
iTunes gift card - $25
Play gift cards - $150

Microsoft Xbox credit (can be used to rent movies - I *think*. Haven't tested it) - $43

Nike gift card - $50
Gap gift card - $20
Under Armour gift card - $10

As a result of these changes, I've made some small tweaks to the above budget categories. (I did some rounding, hence the slight discrepancy between gift card value & budget impact). I'm going to take $500 out of our 2017 budget because of these changes. And, because some of these gift cards (almost all of them?) were bought on a discount, this means less actual cash outlay went into this reduction. We'll see how I get on with this tweak for the budget categories in 2017!

What about you? How do you handle gift cards? 


  1. I have a couple of gift cards that were given as gifts - I treat myself to treats with those. Any that I've purchased myself I treat like cash for instance an expensive grocery store that gave 100 airmiles with a $200 GC I use only for their loss leaders and meat specials (oddly the expensive grocery store often has reduced meat that is way before its best before date). I actually deduct the amount spent on the card from my monthly grocery budget each time it gets used that way it keeps me on track.

    1. You are already on it! Obviously, I've been treating gift cards as splurges. I think you are right - for gifts given to me, it's a fine idea. For things purchased out of my budget, I need to track accordingly.

  2. I am going to have to start looking at gift cards differently, though I have very few of them.

  3. If they're gifts to me, I treat as a great. If I bought as a budget stretcher or even the freebies with certain purchases like Target offers, I'd like to think I use as cash. Probably less successful than I imagine.

  4. This idea makes a lot of sense!

    Another similar thing we do here is reallocate our credit card points. Last year, for example, we reduced our travel budget by the amount we earned in cash back points.