Gift Card Swap Out to pay debt!

My wife and I received a gift cards for Amazon. We are interested in trying to 'swap out' the value of these gift cards by making normal household purchases we would have typically have spent from an existing budget category in YNAB and then move those funds into a budget category to then use the funds in our checking cash we had budgeted in the original categories to pay down some debt. I hope that makes sense!

I have already created a Gift Card Account and funded it with the gift cards. My initial idea was to create a Gift Card Swapout budget category.

Example :

  • I have a Clothing budget category already funded with $200.
  • If I were to buy clothing for $40 on Amazon using the Gift Card 'Account', I would want to move the $40 from the Clothing budget category and set it aside in my Gift Card Swapout budget category to then fund paying a credit card down.

I'm just not sure how to best handle the transactions to make this swapout something I can track easily and not lose my mind over. Anyone done anything similar to get cash out of Gift Cards for other purposes? 

12replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • I don't personally put Gift Cards on my budget, but you really don't have to do anything special.  No extra transactions, or budget moves are necessary.  You simply put the transaction on the Gift Card account, categorize it to Clothing, and you're done.  

    As a couple of fellow forumites are fond of saying....  Money is fungible.  Which means it doesn't matter if it comes from Savings, Checking, Your Wallet, or Gift Cards.  $1.00 is $1.00.  Take it from the Gift Card account, and categorize it to clothing.  Done.

    Like 4
  • As soon as you add the value of the gift cards to your budget, they stop being "Amazon Dollars" and become just dollars. Move the value of the gift cards from To Be Budgeted to your debt repayment category, and you're done. As Bruce said, when you spend, enter the purchase in your "gift card" account and categorize the purchase as normal.

    Like 8
  • Steiner19er said:
    My initial idea was to create a Gift Card Swapout budget category.

    No need for this complication. Budget the gift card funds toward debt if that's your priority. It's true you can't use this particular payment method for debt reduction, but that's no different than not being able to use a CC Payment method at the farmers market or the cash payment method to buy snacks on an airplane. Just use a payment method that is acceptable; the category doesn't care.

    The only thing that would trip you up is if you spent ALL the real cash in the entire budget, because you obviously can't pay some expenses with the gift cards. If this is a danger in your situation, you should not put these GCs on budget. With an AoM of 80, though, I wouldn't think it an issue.

    Like 3
      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 6 days ago
      • 1
      • Reported - view

      dakinemaui 

      dakinemaui said:
      With an AoM of 80, though, I wouldn't think it an issue.

       I would not make that assumption.

      Like 1
      • dakinemaui
      • dakinemaui
      • 6 days ago
      • Reported - view

      Steiner19er You should evaluate whether you will run out of cash, then. Don't forget you typically have money arriving (income) as well as departing.

      Like
  • Thanks all. It helped to simplify it as you stated. I think the only concern I have at this point would be that I only want to pay the debt down out of the funds spent on the Gift Card each month. I'll see if I run into any struggles with that part and come back as needed. 

     

    Thanks so much!!

    Like
      • dakinemaui
      • dakinemaui
      • 6 days ago
      • Reported - view

      Steiner19er why? You have the money now. Not sending it to them incurs unnecessary interest.

      Edit: I mean, it's trivial to send them a payment at the end of the month for the amount spent in the GC account (select those transactions in the GC account to get the total), but again, sending less than what is reserved makes no sense when interest is involved.

      Like
    • dakinemaui I didn't give all the background but my logic is based on the following. This is 0% interest debt. Used to feel like it was no harm no foul... until we realized we'd 0%'d ourselves into feeling handcuffed. Also, my wife received a large Amazon gift card as a bonus from her work instead of the usual Visa gift card she'd gotten in years past. We're trying to pay items down with these funds but don't want to or deplete our checking account until we've officially spent from that gift card to pay balances down at the end of the month. Hope that makes more sense to you. Thanks for challenging the thinking!

      Like 1
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 6 days ago
      • Reported - view

      Backing up...

       When you added the Gift Card account, did you put it on budget or set it as a tracking account? If it's on budget, that money should have showed up in TBB. What did you do with the money in TBB?

      Like
    • Vibrant Put the funds as To Be Budgeted so I showed a balance in them to spend from, then Budgeted those amounts in the Gift Card Spending Budget Categories. Keyed the transactions to the original budget category using that account and it leaves the original balance of the gift cards in the Gift Card Spending Budget Categories.

      Like
      • dakinemaui
      • dakinemaui
      • 6 days ago
      • 1
      • Reported - view

      Steiner19er I had something far more streamlined in mind. The only setup is to increase the amount budgeted toward Debt by the amount you inflow into the GC account. (There is no secondary swap out GC account.)

      Ongoing: Spend from GCs throughout the rest of Jan. At the end of January, you select the outflow transactions made in that GC account in January, which shows a total of $X. The Available amount in the Debt category is, of course, larger than $X, but you wanted to conserve your cash, so just send them $X. Spend from the GCs for another month. At the end of Feb., select the outflow transactions dated in Feb = $Y. Send off $Y to the debt. Etc.

      At some point, the GC account will be empty and you'll have to start budgeting (and sending) real cash toward the Debt.

      Like 1
      • dakinemaui
      • dakinemaui
      • 6 days ago
      • 1
      • Reported - view

      Steiner19er Also, when using a GC for a purchase, I suggest you put the card identifier in the memo (matching what was used in the inflow transaction). This way you can bring up (search for) all transactions associated with a particular card and thereby see the remaining balance with one click of the Select All button.

      Like 1
Like Follow
  • Status Answered
  • 6 days agoLast active
  • 12Replies
  • 112Views
  • 5 Following