Open, regular dialogue about spending limits encourages stakeholders to abide by financial restrictions. Such discussions foster trust and ensure accountability. Customized gift cards can be a fun way to enhance your budget, however, additional expiration dates and fees can put a damper on value. Discarding them may even unlock additional value.
1. Set Clear Spending Limits
Gift cards as spending “caps” in non-essential categories like dining, entertainment and coffee can help establish disciplined spending habits. Prepaid Visa or MasterCard cards may help ensure you adhere to those limits from month to month.
Hunter suggests using alternative payment methods for expenses like gas and council tax that cannot be made with plastic cards, like donating or regifting instead. Doing this takes the money out of your wallet while giving others a use for it so you can spend it more responsibly.
2. Separate Wants from Needs
Many people use gift cards as a means of distinguishing wants from needs, making this method particularly suitable for non-essential expenses such as dining out, entertainment and coffee runs.
However, accounting complications arise due to the unutilized gift card sales that remain. Companies have various approaches for accounting for this “breakage”, potentially distorting sales reports and gross margin trends.
To avoid such imbalances, consider purchasing your gift cards with cashback offers – this will add an incentive to use them and help you stick within your budget.
3. Avoid Credit Card Debt
If not managed properly, a gift card can be treated like cash which leads to debt in the long run. Wherever possible, use gift cards to purchase groceries into gas instead of going over the credit limit.
Make the most of this strategy by assigning gift cards to different budget categories (like groceries, entertainment or gas) so as to stay accountable and avoid overspending. Just keep an eye out for any credit card rules as some issuers consider purchases of gift cards as not eligible for rewards earning or fulfilling welcome bonus minimum spending requirements.
4. Plan for Specific Goals
Self imposed spending limits are easier to achieve when discipline is employed, and utilizing reloadable gift cards can aid with enforcing discipline. This structure can improve adherence to a predetermined list of groceries, gas purchases, and recreational outings.
Gift cards for dining, entertainment and coffee purchases can serve as a budgeting aid and prevent overspending. This approach may also work well when dealing with non-essential expenses like clothes shopping for Christmas, vacation travel and vacation booking. Unfortunately, it may not work so well when used towards larger expenses like rent, mortgage instalments and council tax payments.
5. Use Gift Cards as a Reward System
Gift cards can serve as a great self-treat without knocking a hole in your budget. Furthermore, having them set aside for the inevitable expenses such as groceries and entertainment can help reduce the risk of over-expenditure.
Consider purchasing discount gift cards online via platforms like Prizeout to stretch your budget further and save a percentage. Also look out for gift cards offering cashback or extra rewards during promotions – these give even greater value for your dollar!
6. Prevent Impulse Purchases
Companies typically make more profit from customers who spend over the value of a gift card, adding to overall sales. Understand this process to prevent impulse purchasing behavior.
If impulse purchasing is an issue for you, try including gift cards as part of a monthly budget to prevent unnecessary use of them in unrelated categories. By doing this, they’ll remain dedicated for their intended use rather than being misappropriated.
Calculating the time or work hours that go into purchasing each purchase makes it simpler to evaluate if it is worth its price tag.
7. Be Mindful of Fees and Expiration Dates
Understanding the terms of a gift card and how it should be used are of utmost importance, from fees and expiration dates, as well as keeping track of balances, using them promptly and protecting the cards themselves.
Donate any unwanted gift cards to charity to get some additional value out of them while supporting a good cause, but ensure all applicable tax laws are followed before doing so. Incorporating good financial habits helps maximize enjoyment while preventing common traps that devalue gift cards.
