You know gift cards are a great giving option for birthdays, graduations, and weddings, but you may never have considered using gift cards as a budgeting tool for your family. Let’s face it, it’s hard to stick to a budget, especially with the categories we tend to overspend on, such as dining out, entertainment, and clothing. Some financial experts recommend toting around cash instead of credit and debit cards to overcome impulse buys, but that makes some people nervous. If that’s you, gift cards can be a great alternative!
So how would a gift card help you stick to your budget? Let’s consider some scenarios where they would come in handy. Maybe you need some new athletic shoes and you always buy them at Kohl’s. If your budget for shoes is $50, you could purchase a $50 Kohl’s gift card before you go shoe shopping. This way, you won’t even be tempted to look at the $75 pair of running shoes, because all you have to spend on the gift card is $50. Plus, if you’re a great bargain shopper and find shoes for less than $50, you can treat yourself to something else in the store to make up the difference!
If your family is constantly going over your dining out budget, purchase gift cards for your favorite restaurants for your budgeted amount at the beginning of the month. Once you’ve depleted the gift cards, your family eats at home until the following month. This way you’re not eating (literally!) into your savings, but you still can enjoy dining out within your budget.
This is a great idea for parents with kids in college. Parents may be concerned that the cash they are sending to their college students might be spent on partying instead of groceries or school supplies. Parents could send their kids a gift card to Walmart, Target, or Staples instead of sending a check or cash. Plus the parent may also be able to earn fuel points if they buy the gift card at certain groceries stores that have that type of program.
Gift cards can also teach high school kids a thing or two about budgeting. Many parents feel like their kids treat them like an ATM, constantly asking for cash for clothes, gas, the movies, etc. Give your kids gift cards at the beginning of the month, and make it clear that’s all they get until the next month. You’ll be teaching them to make smart money management choices that will serve them well in adulthood.
The great thing about gift cards if that you can spend them in the store or online. If you’re redeeming online, don’t forget to log into your FatWallet account to earn some cash back. Now that’s a win for everyone!
Additional Budgeting Resources