Gift Cards/Split Transactions/Category/Account Structure

A synthesis of topics. 

First off, I would like to thank all the people who take the time to give really thoughtful replies to people's questions on this forum.  I have learned much from dakinemaui , jenmas , HappyDance , nolesrule , Patzer , and several more regarding this topic (and other topics... Thanks!) 

I came up with this solution based on answers you gave to several other people.  I know that nolesrule and Patzer will think this is over-complicating things, but if the result is that we actually keep track of and use gift cards, I'll do the extra minute of work for each transaction!

Problem

I sometimes receive gift cards for varying amounts and to varying places that I do and do not regularly frequent.  To use them, I have to

  1. Remember I have them.
  2. Try not to inflate my normal spending by planning to use them well.
  3. Carry them with me at the right times.
  4. Track balances.
  5. Repeat process.

So far, the structures of making a list and carrying it or the cards with me on the off-chance that I'll use them or intentionally bringing them on an errand have not worked, so I would like to try YNAB for this.  

Solution

Structure
Gift Card cash account 
Gift Card (sub)category

Process to Receive Gift Card
Add gift cards as inflow to Gift Card category, payee = store, memo = person from + total left on card, green flag.
   Ex: 5/13........... Dairy Queen...............Gift Cards..............Val (5)................$+5
          5/13............Chick Fil A....................Gift Cards............Arin (10)...........$+10
          5/13............AmEx.............................Gift Cards ............Rami (50).........$+50

Spending Option 1
If the spend totals more than the GC, make a split transaction on the CC to show that part of the bill was paid by CC, and part was paid by the gift card. 
   Ex: 5/28..........Dairy Queen..........Split..........................{no memo}.............$-4.35
           ........................................................Treats.......................Ice Cream!............$-9.35
          .....................Payment:CC.........{no category}........DQ Ice Cream ....................$+5.00
Then, go to the budget and move $5 from Gift Card Available to Treats (and cover the 4.35, because I don't pre-fund treats).
Then, go to the original GC inflow transaction in the GC acct, change the balance to (0) in the memo, and make the flag red.  This will tell me it's used up.

Spending Option 2
If the spend is less than what is on the GC, log the transaction in the GC Acct, with a 3-way split: store used, outflow GC cat, inflow appropriate cat, outflow appropriate cat.
   Ex: 5/28 ..........Amazon............Split......................{no memo}........................................$-18.99
          ...................................................Gift Cards...........TP Stand (50-18.99=30.01).....$-18.99
          ...................................................Decor...................TP Stand...........................................................$+18.99
          ...................................................Decor...................TP Stand............................................$-18.99
Then, the only thing I would have to do would be change the original card line to (30.01) and maybe put the flag at yellow so I know not to look at the original inflow.

 

Based on what I have read in the forums, this idea might work.  Does anyone have any feedback or suggestions of pitfalls/easier methods?  I do not have the liquidity that jenmas has mentioned. :)

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  • Now that I've written that whole post, maybe I could eliminate the step of moving money in the budget for Option 1:

     Ex: 5/28..........Dairy Queen..........Split..........................{no memo}..............$-4.35
               ........................................................Treats.......................Ice Cream!............$-9.35
              .....................Payment:CC.........{no category}........DQ Ice Cream ....................$+5.00
              ........................................................Treats ......................move$....................................$+5.00
              ........................................................Gift Cards..............move$......................$-5.00

    Oh, I like that!  No switching screens for my distractable brain!  For now, this shall be my method, unless there are wiser ways out there!  Thanks in advance for sharing (anyone, even if you're not tagged - these people were answering related questions about a year ago, so I know they're not starting from scratch to think through this situation).

    Like
  • Workable, but it does seem somewhat at odds with your stated #2 objective -- "Try not to inflate my normal spending". In your example, you spent more in Treats than was in the Treats category.

    For those very reasons you mention, I do something similar -- the main difference is I don't use a GC category. In my view, money on the GCs is like any other money as long as I'm buying something at that store.

    To avoid account bloat, I also have a single account with multiple cards. However, I use the memo (not the Payee) to capture which card is involved (an ID if you will). The Payee field is "occupied" when it's involved in transfers, so it's not a great choice to hold this information. If you workaround that by entering splits in the GC account, you'll have issues with transfers from CCs increasing TBB. Anyway, I've elected to always use the Memo.

    Receive a GC: Payee = person from, memo: "card ID: optional memo info"
    5/13..... Val..... Inflow:To Be Budgeted..... DairyQueen: birthday gift..... $10

    Budget these funds wherever you like. Could be to Treats -- if I want Treats to be more than normal -- or any other category if I don't. GCs are "fungible enough", assuming they're a small fraction of total on-budget funds. I assume this is what you meant when you said "liquidity" was not a problem.

    Spend Option 2 (purchase fully funded by the GC): simple outflow transaction, but make sure the card ID is in the memo. That might be the same as the store (e.g., card ID = Starbucks), but it might not (card ID = Visa7799). Normal memo information goes after the card ID. For example:

    5/28..... Dairy Queen..... Treats..... DairyQueen: Ice Cream!..... -$9.35

    Spend Option 1 (mixed funding): split transaction entered in the CC register to workaround the TBB increase for outgoing transfers in a CC account. (If this is a PIF card, enter in either register.)

    If entered in the CC register:
    5/28..... Dairy Queen...... Split....... Ice Cream!..... -$5.00
    ..... (category) Treats..... [no memo]..... -$9.35
    ..... (payee) Transfer:GiftCards..... [no category]..... DairyQueen..... $4.35

    If entered in the GC register:

    5/28..... Dairy Queen..... Split..... Ice Cream!..... -$4.35
    ..... (category) Treates..... [no memo]..... -$9.35
    ..... (payee) Transfer:Cap1Visa..... [no category]..... [no memo]..... $5.00

    (Again, don't forget to adjust the CC Payment category if you're using the stock CC handling.)

    Additional tricks:

    • A search for the card ID immediately shows the remaining total, so I don't bother to track remaining amount in the memo. (You certainly could, of course.)
    • When a card is "used up", I clear all related transactions and reconcile to a $0 balance. This allows me to typically only show cards with money.
    • My two high-traffic cards have dedicated accounts. I just got tired of putting the ID in the memo.
    Like 1
    • dakinemaui Thanks for your reply!  I am glad you shared your set up, and thank you for explaining why you do each part.  I particularly like the tricks.  And I have no idea how you know the remaining total automatically if most of your GCs are in one account... If you search for the card ID, will the running balance show it?

      Also, what would I have to do to adjust the CC Payment category?  I am PIF and I'm pretty sure I use the stock handling.  It looks right without doing anything.  I'll insert a picture.

      My example wasn't really at odds with trying not to inflate spending, though I know sometimes it will happen because we have so little discretionary spending budgeted for, and most gift cards should be for the extra stuff.  Maybe using treats as an example was a bad idea on my part, because I always fund Groceries = 500, Dining Out = 0, and Treats = 0.  Throughout the month, if we choose to dine out or get a treat, we move money from Groceries.  Perhaps this is an idiosyncrasy for us.

      Regarding the category for Gift Cards, it makes sense that you don't have one, because it does simplify things.  However, we have a pretty tight budget (and don't regularly patronize some of these stores), so I would hate to think that I have $20 in Decor, find something at Walmart, and then later realize that the $20 was really in a Michael's gift card (and I could have bought the sewing things with that $20 from Michael's instead of Walmart).  Another concern is Amazon or Target - I could buy from many categories from these vendors, but if I go ahead and budget to Household or Fun Together, there's nothing to tell me that I must use those stores to buy $20 of what I see available in the category, and nothing to say that getting Games instead of Decor should hardly be considered a WAM.  I just think I need to match reality as much as possible. :)

      Thanks for your feedback!

      Like
    • dakinemaui Oh, cool.

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    • dakinemaui Where on earth is "search total"?

      Like
    • Move Light Sound Life My recollection is it's shown at the bottom of the register when you've searched for something. If that's not there, you could click the "select-all" box (top of the check-box column), which shows the "selected" total. I would have sworn it gives a total of whatever the search brings up, though, but I can't test that at the moment.

      Like
    • Hi Move Light Sound Life !

      A great way to quickly find totals of transactions is using YNAB’s Selected Total feature. This .gif will walk you through it!

      Any transactions you select will be automatically totaled in the upper right-hand corner of the register. You can use this to get a total when filtering and searching your All Accounts tab for transactions in a certain category, with a particular colored flag, a distinct payee, or any other criteria you need!

      Like 1
  • Move Light Sound Life said:
    Also, what would I have to do to adjust the CC Payment category?  I am PIF and I'm pretty sure I use the stock handling.  It looks right without doing anything.  I'll insert a picture.

    Yes, you are using the stock CC handling, but your picture shows the workaround I mentioned (to pull from the GC account). If, instead, you enter the split in the GC account, it will pull from the CC account, resulting in an increase in TBB.

    As an easier demonstration, ensure TBB = $0. In the CC account register, enter a simple $10 outflow transfer to the GC account. Look at TBB to find it's $10. (Delete this test transaction when done.)

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    • dakinemaui 

      Interesting.  Thanks for the explanation.  Glad I understood your workaround. :)

      Like
  • Move Light Sound Life said:
    My example wasn't really at odds with trying not to inflate spending, though I know sometimes it will happen

     My point was that the category balance (whatever category is relevant) is supposed to be used for spending guidance. With a GC category, that's no longer true. You have to add those two to see the true total you can spend.

    Further, it really breaks down when a store crosses categories (e.g., Michaels). It's going to be really easy to double-count that GC money in your head, thinking it can be "added" to the Home Decor category balance but then later (before you spend it) thinking it could be used in conjunction with some other category. If you don't "recompute" your idea of what Home Decor actually is after using the GC for something else, it's double-counted.

    In other words, you have to expend mental effort to keep things straight, rather than letting the tool do that job.

    My thought is that if you want that money to be for "extra" stuff, then budget it in the category relevant to that extra stuff, and then rely on the category. What you see is what you can spend without impacting anything else in the budget.

    Like 2
  • Move Light Sound Life said:
    I would hate to think that I have $20 in Decor, find something at Walmart, and then later realize that the $20 was really in a Michael's gift card

    The actual reality -- and this is a subtle point -- is that $20 you think is in Decor isn't tied one-to-one with the funds on the Michael's GC. The budget is your cheat-sheet to yourself that you want to buy at most $20 on Decor stuff.  Furthermore, it's perfectly fine to buy Decor stuff at Walmart if they have what you need/want.

    If Walmart gives you the Decor stuff you need, then you'll just have to wait to buy Decor at Michael's.

    Hopefully the danger is clear -- let's say you drain the Decor category at Walmart. Then because you have a Michael's GC burning a hole in your pocket, you go to Michael's and buy MORE decor stuff. No problem, you think, because you simply reallocate from the GC category. However, in the end, more is spent in Decor.

    Yes, you do have to look outside of the budget to know that Michael's might be a good place to look for Decor and that you have a GC that they'll accept. However, we do this all the time in similar situations without consulting the budget. I have several CCs, and I know that I should use my Citibank card when I go to a restaurant (because it gives higher cash-back rate).

    There is a potential issue that you spend all your real cash, leaving various categories backed only the "money" wrapped up on the GC(s). If the GC is not relevant to the categories (e.g., Rent), you'd be in trouble.

    Everyone's definition of "tight" varies, but if the GC account total is under, say, 1% of total on-budget funds, I wouldn't bother trying to treat GC "money" any different than any other money. As evidenced from the split transactions you described, it's a fair bit of work.

    Like 4
    • bevocat
    • Sometimes, It Just Sucks to Be You
    • bevocat
    • 1 yr ago
    • 2
    • Reported - view

    I'm not sure I see the value of all this work to avoid the one-time work of setting up an account for each gift card. I have them set up this way and it works the same way as it works using my toll tag or my fiance uses his SNAP benefits card. I have 7 other gift cards on-budget right now and an Amazon gift card account that gets closed and re-opened as needed.

    I like having them as individual accounts, even if there's only one category they can ever be spent for. It seems very easy to me, and it doesn't inflate my expenses because I input them as they are spent from the card, not when I get the card. It's worked for me for over 3 years now.

    Like 2
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • 2
      • Reported - view

       My process mirrors what bevocat does.  I list all my gift cards as separate cash accounts.  I have 6 active GC accounts right now:  about $800 in grocery store and specialty food gift cards, $100 in an Amazon account, $100 on a gas card, and $4.48 on a Shoppers Drug Mart card.   The grocery cards represent about 4 months of spending, and there isn't $800 in my food categories at this time.

      When I spend a GC down to zero, I rename it to a generic name, Gift Card, and I close the account.  If I get another card, I re-open the account and change the name again to whatever card I want to display a value for. I really don't care if the account was a DQ card last year and became a Boston Pizza or Shoppers Drug Mart card this year.  I just need help keeping track of how much is on an active card until it's spent to zero.  Seeing it in my account list reminds me to use it wherever convenient.

      The complicated DQ transaction you posted as an example would look like this in my register:

       Account: DQ Gift Card;  Payee: Restaurant or food truck; category: pocket money; memo: blew the diet but it was worth it.

      Like 2
    • bevocat I think the most work comes from having a gift card category, perhaps.  I am, as yet, still uncomfortable with assigning a Sonic gift card to clothing.  Based on my history, I won't make it to Sonic, or if I do, I won't remember I have the gift card because I will be rushing around.  3 months later, when all of the bad financial things have happened, I'll be short $10 because I bought clothes instead of a hamburger (or whatever Sonic serves). 

      Ok, maybe this is hyperbole, but I need something that will help me think about intentionally using these gift cards, because I just don't shop at these places.  I appreciate all of these gifts, and I want to make use of them!  Even if I am not used to the vendors.

      But, would you really have a different account for each of 15-20 GCs with $5-$15 on them?  I suppose it would be easier to see which stores/restaurants I should keep in mind...

      Like 1
    • HappyDance This is good food for thought, thank you!  I just have to decide if I want to have 20 or so GC accounts... And what to do about putting the funds in a category.

      Like
    • bevocat said:
      I'm not sure I see the value of all this work to avoid the one-time work of setting up an account for each gift card

      Account-within-account semantics can be achieved solely by putting a card identifier in the memo. It's a convenient way to "collapse" the rarely used accounts, much as one would collapse a group of categories.

      Regardless of whether a card is represented with a dedicated account or with a combined account, I think the important concept is that GC money is "fungible enough" in the vast majority of cases. You do bring up an additional important point that it's best when spending is recorded when money leaves your control, rather than when it changes "form"; I see that as a consequence of being fungible, much like moving money between checking/savings or checking/wallet doesn't affect the budget.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Move Light Sound Life 

      Move Light Sound Life said:
      I am, as yet, still uncomfortable with assigning a Sonic gift card to clothing. 

       I don't include single category gift cards in YNAB at all. Only those that have the potential to be a mix of categories are in my budget.

      Like
  • dakinemaui This is a lot to think about, but with very clear scenarios.  I will sleep on it, and hopefully digest the information.  Somehow, I do need a solution to consulting which cards I have.  For me, that is a huge personal shortcoming. 

    But, what about this scenario: Someone gives me $150 to a superstore as I walk in.  I had already provided for our needs.  I could save the $150 for next month's groceries (In my experience, the gift givers are supremely unimpressed with this), or I could buy some pastries, a nice candle, a robot, a book, craft supplies, and a scarf.  These might occur on one trip or over a few. 

    In our budget, none of those categories are funded already (except clothing, but my husband needs new pants before I need a scarf - the clothing money is not for me to buy scarves).  How would I have known to put the correct amounts in the correct categories?  I wouldn't have bought any of those items without the gift card (because I know that our goals are paying down debt and saving, not buying stuff that we don't expressly need).  If I only use the card for funded categories like groceries or household, this question is moot, but how would you use YNAB in this situation?

    I guess my stumbling block is that, when we get money as a gift, we put it in a "gifts for us" or in that person's fun money category.  Then, we can ruminate about what kind of gift that person would enjoy us getting.  We don't have to decide right away what we'll get.  But we also don't have to worry about remembering to choose the gift from a certain store.

    Maybe the other stumbling block is that when I say our budget is tight, I mean that money is tied up for bills, savings for medical/car, variable expenses (groceries, gas, household), and an aggressive student loan payment.  If we spend money in any other category, that means we tighten the budget for groceries or household, or decrease the debt payment (don't want to do!), or pull from savings as a last resort.  So, these gift cards being for more discretionary spending are inherently outside of the regular plan, and that's what givers intended.  I guess the key to them not being liquid is that I wouldn't normally buy things at their stores, and I can't pay my student loan with them... It also doesn't make sense to me to have $100s of my medical savings split between various restaurants or stores...  But, I'll sleep on it.  

    Like
  • Ok, maybe this is a better question: 

    Does anyone else start with $50 pocket/fun money, buy something with it, and then recategorize the purchase and money to fit whatever you bought?

    For instance, I have $50 to do whatever with, so I buy a stained glass lamp for $40.  This is decor, so I categorize the transaction as decor and move $40 into the decor category.  I now have $10 left in my fun money category.  

    Why shouldn't I do this with gift cards?  Until I know what I'm going to spend it on, why not have a lump category for the funds?

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • 1
      • Reported - view

      Move Light Sound Life 

      In that example, I would change the category on the transaction to Furnishings or maybe even Sundries, and still have $50 in my entertainment category.  $40 is still a small enough amount that I might fit it in under Sundries, a category I use for everything I buy to keep me, my clothes, and my home clean and functioning.  A lamp, no matter how pretty, could arguably go under Sundries for me.

      Ooops -- Squirrel! -- stay on topic.  Gift cards.  Yeah.  Okay.  That could work, but I'd rather have 20 accounts that I close off as I use them, than build up 20 categories in my budget. I can't explain why exactly. 

      Like 1
    • Move Light Sound Life I frequently reallocate within the budget if I deem a purchase more important than something else in my budget. I typically rob the lowest priority category that has money, then the next lowest, etc.

      One difference is that a category of "Sonic Gift Card" isn't really a purpose or financial goal. I can't assess the relative importance of that against other categories. If I choose to take money from a category called Sonic Gift Card, it's not apparent to me what I'm giving up or delaying. OTOH, it's clear to me if I shift funds from Fun Money to Decor, then I'm giving up or delaying Fun Money activities/purchases.

      However, that's not really the biggest difference. You're currently trying to synchronize that GC category balance with the balance on that gift card. In contrast, I doubt that's something you do with Fun Money. Fun Money is just some amount reserved for those activities/purchases, and where the money comes from doesn't matter until you actually pay for something. You might swipe one or more different CCs or maybe even write a paper check for such things during the month.

      I think it's fine to have an "I don't know what it's for yet" category, but that's not what you've described by having a dedicated category for every GC.

      I know, lots to consider. Hopefully you're not too overwhelmed. All of this feedback is meant to make things easier on you in the long run. This is an issue about which I'm especially passionate, so please forgive my exuberance. 😉

      Like
    • dakinemaui said:

      I know, lots to consider. Hopefully you're not too overwhelmed. All of this feedback is meant to make things easier on you in the long run. This is an issue about which I'm especially passionate, so please forgive my exuberance. 😉

      The passion has been great!  It has really matched my hyperfocus, which is common as I work through new ideas.  Also, sleeping is great for mental digestion.  

      Do you have any other topics that inspire such exuberance, or are you just passionate about gift cards (or YNAB in general)?

      Like
    • Move Light Sound Life The passion thus far is actually more related to the topic of fungibility and the inherent simplifications that are possible once understood. Although, I do like a GC account because it defers the spending and choice of category until it actually occurs. (I think you said the same thing at some point.) A similar topic is whether to use a cash/wallet account (allows deferral of date & category until it's known) or regard cash as "spent" immediately upon withdrawal from the ATM.

      I think primarily, though, I value efficiency, which certainly colors the various workflows I use in YNAB (as well as hobbies and self-education). I have an engineering background, which seems to mesh well with such a priority. 🙂 Cheers!

      Like 1
  • Move Light Sound Life said:
    I am, as yet, still uncomfortable with assigning a Sonic gift card to clothing. 

    Yep, this is the biggest mental hurdle. 

    Consider, though, that Sonic card will fund purchases from the Fast Food category, which means you don't need to allocate "real" dollars toward that Fast Food. That, in turn, means that you have more "real" dollars to allocate than you otherwise would have. What ever should you do with those "extra" real dollars? You might consider increasing  the Clothing category with them. :-)

    The logical fallacy is to think it's the sonic money that's going "into" the clothing category. When you make a budget entry to Clothing, you're just saying you want to reserve $X in total for clothes out of all the ways that you might pay for something. You are not specifying which particular dollars those are, merely the total number.

    If that's too much of a leap, you have a couple simpler interpretations as to how to handle the GC money:

    a) you could say those sonic dollars went into Clothing -- yes, I agree this sounds weird

    b) you could say that real money used to be in Fast Food, but then you got the GC, so you took the "real" money out, put the GC dollars into Fast Food, and put the real money (that used to be in Fast Food) into clothing.

    At the end of the day, Fast Food is funded, and Clothing is higher than it used to be. Based on the end state alone, it's impossible to tell whether you did (a) or (b)!

    A related scenario plagues many new users who want to treat the money in their savings account as somehow being "special" or "different" than that in their checking account. The desire is to try to use the budget to capture this distinction, rather than realize the distinction is actually immaterial. This blog post usually clears that up by imparting a sense of what "fungible" means. In your case where GC money is a negligible fraction of on-budget funds -- so you won't be caught needing to pay rent with the Sonic card (because you spent all your real cash) -- that GC money is effectively fungible as well.

    Like 2
    • dakinemaui This was one of the most exciting "tricks" I've learned on YNAB. A couple of weeks ago I was running low on grocery money and knew I had committed to going out to eat a couple of times, and that category was also pretty low. Then I found a Bed Bath & Beyond gift card for $100 at the bottom of a drawer where I often store things temporarily before finding a permanent place for them. From last year, and I had forgotten I received it! I saw a variation of your explanation (b) in another thread here, and that made it click for me. I promptly opened a gift card account, moved the $100 into the home goods and maintenance category, and then moved $100 in "real" dollars out to fund my food categories.

      Like 5
  • Move Light Sound Life said:
    I wouldn't have bought any of those items without the gift card (because I know that our goals are paying down debt and saving, not buying stuff that we don't expressly need). 

    If you wouldn't have bought any of those items before you got the GC, and your priority is debt reduction, then I would submit that budgeting that newly found "money" toward debt reduction would better serve your goals. Or, if you prefer, move the real money that was budgeted for groceries to debt reduction and budget the GC money to groceries. (The a/b scenario in my earlier message.)

    Gift givers are supremely unimpressed only when you let the cat out of the bag. Are they unimpressed if you returned an actual shirt they gifted you that didn't fit and got a smaller size that did? What if you returned that shirt for a pair of boots, instead? Would that be OK? 🙂 Is this really any different? I often face the same issue, and I usually thank them again later and say I enjoyed their gift greatly -- which is in fact true, even if I were to pay down debt with it!

    Like 1
    • dakinemaui 

      I think I'm bad about not letting the cat out of the bag.  Someone in my family once gave me a Visa card, and I excitedly responded that I would use it to buy some nicer groceries that I had been wanting.  I was in college without income, so my money was really only being used for tuition, housing, food, and minimal supplies.  He was aghast, and said I should use it to go out or something, not for groceries.  Oh well.'

      I'll have to practice saying "I enjoyed your gift greatly." :)

      Like 2
  • Move Light Sound Life said:
    when we get money as a gift, we put it in a "gifts for us" or in that person's fun money category.  Then, we can ruminate about what kind of gift that person would enjoy us getting. 

     That doesn't have to change. Way back up top, I mentioned you can budget this money wherever you like within the budget. I'm just challenging the notion that a Michael's gift card mandates that your eventual gift actually be purchased at Michael's.

    Like
  • Move Light Sound Life said:
    I guess the key to them not being liquid is that I wouldn't normally buy things at their stores

    Part of that whole "effectively fungible" viewpoint requires that you would ordinarily shop at that store at some point. I misunderstood you to have said the cards are liquid, so I apologize that has colored my comments.

    For cards that I know I will never use, I simply exchange them for something I know I will use -- much as I would exchange a shirt I didn't like! I use cardpool.com to convert such cards to electronic Amazon gift cards. (No driving around, I just get an Amazon code in a few hours.) Sure these services take a cut of the value, but they convert it into something that is effectively fungible, because I will shop at Amazon at some point.

    I mean let's face it: a slightly smaller gift I actually like is way better than a bigger gift that I don't like at all.

    Like 3
    • dakinemaui 

      Cardpool is a really interesting idea.  It may not be worth it for the $5 ones, but it's definitely something to keep in mind!

      Sorry for being unclear about the liquidity.  I was trying to figure out what the pertinent details were (and how to express them) as I was going along.  

      But, your comments have still been good, because they made me really think about why I wanted to do what I wanted to do, while still giving me a good picture about the way things could work in the future. 

      Like 1
  • Move Light Sound Life said:
    It also doesn't make sense to me to have $100s of my medical savings split between various restaurants or stores... 

    Why are you choosing to regard the medical savings as the category that is split between various restaurant gift cards? If Medical is the only category with money in it, then I agree that you have little choice. However, typically there are various categories with money in them at any given point in time.

    The real money shifts to where it's needed at the time of purchase. As long as the budget as a whole has significantly more than the amount tied up in GCs, the fact you can't spend GCs on medical, rent, electric, etc. doesn't matter because you don't need to do so.  

    If you have a need to simultaneously drain all your categories such that GCs are the only funds remaining in the budget, that would indeed be a problem. Forget any notion of gift card fungibility in that case.

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  • Ok, you are all amazing!  Thank you for your many ideas, scenarios, and explanations.  I am the kind of person who likes to understand many variations and implications of something before I implement it, and you have fulfilled that in this discussion!  It's always nice when people share their passions (makes the learning easier for me).  So, thanks, dakinemaui , bevocat , and HappyDance !

    I think what I will do right now, based on these facts...

    • Our regular spending is very limited
    • We don't habitually spend at these stores
    • My main problem is of remembering I have these cards so that I can use them! (What a problem to be thankful for!)
    • Most of the categories that would apply are not normally funded (we're not as established as y'all are), OR
    • More than one category applies to potential use, and, because of the above, we need to not liquidize the GCs by arbitrarily budgeting the funds.

    ...is to input the cards as separate accounts by vendor...

    • I actually like the single account better for long term, but I think this will help me remember to check what cards I have. 
    • Of course, if I get into it and don't like it, I'll just transfer all transactions to a single GC account.  That's easy to switch if I set them up using the "card ID" in the memo trick.

    ...place the GC funds into a single holding category called Gift Cards...

    • We do this with other gifts as well - there's $75 sitting in a gifts for us category so we remember to use it for something gift-y that the giver would appreciate.  Maybe I'm just bad at not letting the cat out of the bag, but what am I supposed to write in the thank you note?  Thanks for the wedding money, my student loan debt is now lower?  Thanks for the teacher appreciation gift, my student loan debt is lower?  No... People feel unappreciated and stop the gifts.  They much prefer, "Thanks for the wedding money, we got pots and pans, or a book set we have enjoyed reading together and will go on the shelf for future children."  Or, "Thanks for thinking of me at the end of the year - this $5 to Bahama Bucks helped me get through the summer heat with some tasty ice."  Giving and receiving gifts is about building community, and I want to respect that. 
    • I would hate to get a Barnes and Noble gift card, put $40 in my fun money category, forget that it's actually on the GC, check my fun category, and go take a ballet class.  The only other categories we have funded are bills, medical, auto maint, Efund, debt payment, and variable expenses (groceries, household, gas).  I have been specifically not taking class so that we can prioritize these other categories, so I don't really consider the GC fungible in our case, at this point in time. 

    ...use the split transaction to move$ from the GC category to the category the money ended up being spent in...

    • I think this takes as much or less work than remembering to go to the budget page and move money there.  
    • Plus, this tracks the move $ies.  
    • It's a little messy and cumbersome, so we'll only use this process with GCs. 

    ...and make sure to correctly represent any credit card use with a "payment" from the assisting GC in the transaction.  See pic. Description in bullets below.

    • Split Line 1: payee = store, cat = split, memo = item, outflow = net charge to CC
    • Split Line 2: payee = none, cat = applicable to track item, memo = item, outflow = total price
    • Split Line 3: payee = GC account, cat = none, memo = item, inflow = GC value used
    • Split Line 4: payee = none, cat = GC cat, memo = move$, outflow = GC value used
    • Split Line 5: payee = none, cat = applicable to track item, memo = move$, inflow = GC value used

    Five lines with CC assist; only 4 with just the GC (don't need line 3).  And no worries about forgetting to move money in the budget!!!  Right now, this is the only part my husband is not sure about, and I agree it's a bit weird, but we'll try it for now and tweak as needed.

    So, yeah!  We'll see how this goes!  Thanks again for sharing your thoughts!  If I've changed my handling in a few months, I'll update the process so anyone else reading can consider if it would help your situation. 

    Thanks again!  :) :) :)

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    • Move Light Sound Life Sounds like a good plan for now. I think the single gift "holding category" exactly matches how you seem to be thinking about these things. Good luck with everything!

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  • Update: 

    I'm glad I thought through the logic of using a split transaction to move the money from my gift card category to the category the gift card was used in. Because of that work, I know I understand the mechanics of what needs to happen, and I can refer back to this post to double-check my thought processes.

    However, moving the money in the transaction instead of in the budget results in a zero-sum activity in the reports (and category activity, duh).

    I don't like it, so I'm not doing it. The rest of my plan has worked wonderfully so far. I've even been able to use a gift card for a regularly planned purchase and move its money to TBB - fungibility ftw.

    Turns out we have about 1/3 of what we live on in a month in GCs. All the extra work in case of non-fungibility is definitely needed. 

    Thanks for your help!

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