How to Budget Using Gift Cards

Budgeting with gift cards is a relatively new concept that’s similar to using cash envelopes to stay in control of spending. But it’s easier, works just as well to keep you on track - and you’ll get some cashback if you choose wisely.
Mathew Megens
November 16, 2023
min read

If you struggle to stick to your monthly budget, the gift card method could make life simpler and less stressful by taking willpower out of the equation and replacing it with a plan. At the start of the month, simply set aside specific amounts for your household needs such as groceries, bills, clothes, Christmas savings and more. Now instead of withdrawing cash and stuffing it in different envelopes to prepare for these expenses, you could buy gift cards for your favourite supermarket or fashion brand. From Selfridges to Primark and Asda to Iceland, there’s no shortage of gift cards to choose from. 

When you have committed to spending a specific amount in a certain way, you’re less likely to overspend. Having a gift card is not like having a debit card. You can’t go over and above what you sensibly decided to spend at the start of the month - before you were tempted in the supermarket by those extra chocolate biscuits or a Prosecco promotion. With the cost of living at an all time high, most of us simply don’t have the spare cash to impulse buy. We have to account for -  or save -  every penny we earn. Budgeting using gift cards is a smart way to stay on top of your expenses so that your earnings stretch over the whole month and you have some left over to save up for emergencies .Read on to find out exactly how to do it.

1. Create your budget 

Gift cards are a tool to keep you on track of your financial goals. But do you know what those are yet? To maximise your savings while budgeting with gift cards, it’s important to create your monthly budget and work out how much money comes in and goes out each month. Budgeting like this will help you work out where gift cards can be fitted in to keep you organised and on track.

Start by calculating your monthly income, including all income from a salary, benefits and additional earnings. Next, list your monthly expenses, including fixed costs (like rent or mortgage payments) and variable expenses (such as groceries and leisure).

You should end up with a list - or spreadsheet - that shows you exactly where you spend your money each month. You could create jars within the HyperJar app for a visual representation of this - it’s often handy to physically see what’s happening to your money.

2. Identify which budgeting categories you’d like to use for gift cards 

It’s not possible to buy gift cards for all your monthly expenses, so the next step is to work out where it makes sense to buy them based on where you regularly spend your money. For example, you can’t currently pay for gas, electricity, rent, mortgage instalments or your council tax using a gift card. But you can use them for holidays, groceries, nights out, clothes and some transportation costs (like Uber).

If you open the HyperJar app, you’ll see a list of all the gift cards we offer. Grocery retailers include Asda and Iceland, and there are brands like Cineworld, All Bar One and Harvester for leisure spending. Go back to the categories listed on your monthly budget and write down some gift card options that align with where you spend your money.

Where would you like to stop impulse buying? If you know that it’s tempting to overspend doing the weekly shop, loading up a gift card in advance is a great way to give yourself a tangible spending cap to keep you on track.

3. Figure out your gift card budgets

To budget with gift cards effectively, it’s important to identify a few spending categories that you often overspend on and buy gift cards for an amount that covers the basics in each of these. Loading money onto a card will give you a physical limit to help you avoid impulse buys and reduce overall costs.

Go back to your monthly budget and work out how much you need for food shopping every month to eat well within your limits. Do the same for entertainment and other categories.

For example, you might allocate £250 a month for food and £200 for entertainment. You could commit it to a gift card with one shop, such as £250 with Asda, or divide it into £150 for Asda and £100 for Iceland, depending on where you shop. For entertainment, you might want to spend £50 at Cineworld, £50 at All Bar One, £50 for JustEat and £50 for Ticketmaster.

4. Research your gift cards

There’s a difference between gift cards and prepaid cards. Prepaid cards are a form of debit card, nearly always connected to a brand like Visa or Mastercard, that you can use to pay anywhere. You can’t go overdrawn using prepaid cards as you can only spend what you have in the account connected to the prepaid card. 

Gift cards are not payment cards in the traditional sense. Instead, they tie you to spending with a specific shop or group of shops typically using a barcode or numeric code that you enter at the checkout. 

Here are three key questions to ask before you buy a gift card.

  1. What's the expiration date of the card? How long can you keep the card for?
  2. Are there any fees with the cards?
  3. Do the cards have any restrictions?

Before buying a gift card, read the terms and conditions to understand any restrictions on usage. Some gift cards can only be spent online and not in store. M&S gift vouchers cannot be spent in the M&S concessions in petrol stations. Make sure you know all of this in advance, by reading the T&Cs,  to ensure the gift card can be used in a way that fits in with how, when and where you shop.

5. Buy your gift cards and set deadlines for use

Calculate your monthly expenses and allocate money to a gift card to keep you accountable until your next pay day. It’s a good idea to buy them all at the same time of the month, perhaps just after you get paid, so you can keep track of when they expire.

It’s also wise to set just enough funds to last you a month and nothing more, so that there’s no risk of them expiring before you’ve used them.

Why it’s beneficial to use gift cards for budgeting 

Wherever we go, we’re bombarded by adverts on the TV, on social media and on billboards, tempting us to spend money. Using gift cards for budgeting can be helpful as:

  • Gift cards can help you avoid overspending
  • Gift cards can help you track your budget
  • Gift cards can help you save money
  • Gift cards can help you reach your financial goals

Your monthly budget is your map for staying in control of your money. Gift cards are the compass that keep you on track, so that everything you buy is related to your budget goals and targets.

Tips for saving money using gift cards

Another benefit of using gift cards over cash envelopes for your monthly expenses is that saving money using gift cards is easier than you’d think. There are more to gift cards than helping you stick to a budget, they are an excellent way to save money on expenditure.

Use your gift cards to pay for non-essential items

Using gift cards to pay for non-essential items like furniture can be a brilliant way to save Firstly, it imposes a natural spending limit, preventing excessive expenditures on non-essential items and promoting budgetary discipline. Secondly, buying a gift card through HyperJar will get you cashback, so you save money on each non-essential item you buy..

Avoid using your gift cards for impulse buys

Before making any transactions, create a specific list of planned items or necessities, aligning them with the purpose of the gift card. By sticking to this pre-determined list, you can sidestep the temptation of impulse spending on non-essential items.

Stack gift cards with sales

Strategically using gift cards during sales events or combining them with coupons can amplify savings. Shop around for the best rates on gift cards and shop around for the best sales prices and you’re getting double the discounts.

How to make the most out of gift card budgeting 

To get the most out of gift card budgeting, start by strategically aligning gift cards with your budgeted  spending categories. Identify your essential and non-essential expenses, such as groceries, entertainment, or dining out, and acquire gift cards for relevant retailers through HyperJar. With each gift card you buy, you’ll receive INSTANT cash back in the HyperJar wallet.

With HyperJar, you can allocate these gift cards to designated jars, providing a visual representation of your budget and helping you stay disciplined. Regularly review your gift card balances and adjust allocations based on changing priorities or upcoming expenses, ensuring a flexible approach to budgeting so you don’t yo yo between cutbacks and overindulgences. 

Discover your budgeting success with HyperJar cashback 

To stay on track of your budget, save money and get rewarded for spending, it pays to use HyperJar gift cards. Have you got any Christmas or birthday gifts to buy? You can get cashback on these if you use HyperJar gift cards to pay for your basket. This can go straight back into your monthly budget to be saved or spent elsewhere.

Every time you buy a gift card through HyperJar, cashback is instant. You’ll see it land in your HyperJar wallet and then you can either keep it there or move to a different jar to allocate it for a specific expense. By strategically using gift cards you can set clear limits on designated spending as well as enjoy extra cashback to save up or spend elsewhere.

Save money every time you shop with instant HyperJar cashback

You might be thinking that this all sounds great, but that there is still a large chunk of your budget that this won’t work for. What about council tax or gas? What if you don’t want to be limited to one store (or coffee shop’s) gift card? A pre-paid card would be your next best option. You can still set spending limits and avoid the temptation to overspend by loading it up with a specific amount of money, but you can spend it anywhere. It works best if you’re fairly disciplined about spending money evenly in each category. And of course, you can do both. Have a pre-paid card for some expenditures and gift cards for the areas in which you frequently overspend. HyperJar offers multiple ways to stay in control of your budget - just choose what’s easiest and most helpful for you to manage.

Mathew Megens

Co-Founder of HyperJar

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