Giving A Gift Card Is The Best Way To Help Frugal People Spend

Since middle school, I've embraced frugality, largely influenced by my parents' thrifty habits. They drove aging cars, donned the same clothes for decades, and preferred water at restaurants.

Today, I drive a nine-year-old car, opt to repair rather than replace my belongings, and typically stick to water with a lemon slice when dining out. It's ingrained in me to seek maximum value from my possessions.

However, excessive frugality can detract from quality of life. From purchasing low-quality items to squabbles over spending with my wife, I realize the need for balance.

Then, one day, a significant gift card helped me break free from the grip of my frugal tendencies.

A Gift Card Helps Frugal People Spend

A Financial Samurai reader, employed at an insurance company, invited me to address her team during their annual offsite.

As compensation for my time, they generously purchased copies of Buy This Not That for all employees and sent me a lovely gift box, complete with a $500 gift card.

While I've received two smaller gift cards in the past for $10 and $20, this one was unprecedented. Surprisingly, I found myself spending it relatively quickly. With each purchase, it felt like I was indulging in something free, despite it being my earned money.

Given the substantial value of the gift card, I felt compelled to use it promptly to avoid any risk of loss or theft. Since cashing it out wasn't an option, I had to brainstorm items to purchase.

Don't Receive Many Gifts For A Reason

Here's a rather sobering realization: apart from my wife, I rarely receive gifts from anyone else. Not from my friends, not from readers, not even from my parents. The primary reason? I tend to keep my achievements and personal milestones to myself, leaving others unaware. It's not in my culture to celebrate the individual.

For those who appreciate my work and wish to send something, they'd have to navigate to my About page, scrolling all the way down to find my mailing address. I intentionally refrain from using pop-up menus or donation banners. Oh, and instead of sending me something, I'd rather you send money to a charity you really care about.

Growing up, my birthday was always overlooked as it falls during the summer break when school is out. Consequently, I never experienced the typical birthday celebrations my classmates experienced.

I vividly recall a disappointing incident at 13 in Kuala Lumpur, Malaysia. I meticulously planned a party, inviting around 40 guests, only for about 10 to show up. Within an hour, most left for another gathering. That moment shattered my desire to host events.

However, focusing on the positive, I've made it a personal rule to always attend events I'm invited to. I understand the effort involved in planning, and I empathize with the disappointment of low turnout. Showing up consistently is my way of helping the host never feel the way I did as a 13-year-old boy.

Every Purchase Of The Gift Card Felt Like A Gift

Even though the $500 I received was payment for a speaking engagement, I found great satisfaction spending it. In comparison, depositing a $500 payment into my bank account doesn't bring me any joy, even though that’s what I’d normally do.

This lack of joy in earning is similar to why I prefer investing in real estate over stocks. At least I can enjoy my wealth while potentially earning a return. Stocks, on the other hand, provide no utility or joy.

Here's a glimpse into my transaction history, where each purchase felt like a gift, despite many being necessities. Let me walk you through some of the items I bought with the gift card.

On Saturday, April 13, 2024, I splurged $114.92 on Supreme gas. While I'm aware that opting for top-tier gas is a waste of money, I decided to treat my Range Rover Sport after seven years of regular fuel. Only cost about $8 more for Supreme than Regular.

Then, on Monday, April 15, 2024, I indulged in two Snake River Farms wagyu rib-eyes, spending $72.94. Fresh off a family ski vacation at Palisades Tahoe, I was craving a quality steak. Although my wife and I typically enjoy sharing a 28-day dry-aged rib-eye from Six Peaks Grill at the Everline Resort, we opted to save $85 after tax and tip by choosing wagyu steaks from the local grocery store. The entire dinner meal out would have cost closer to $150 after tax and tip.

The following day, Tuesday, April 16, 2024, I allocated $126.20 for rocks, mulch, weed blocker, and stakes. Since my daughter doesn't have school on Tuesdays and Thursdays, I took her to the landscaping store.

We plan to embark on a landscaping project at our new home, turning it into a father-daughter bonding experience. Through this project, I aim to impart to her the values of hard work, maintenance, and the transient nature of things.

Other purchases made with the gift card included a visit to In-N-Out Burger, additional gas, and some snacks. How wonderful it is to have the flexibility to spend my gift money how I want, instead of pretend to enjoy another sweater.

Give The Frugal People In Your Life A Gift Card

Even though a $500 gift card doesn't significantly reduce our household expenses, it rekindled my enthusiasm for spending money. Interestingly, it also nudged me further towards decumulation, a spending phase I initiated in mid-2023 upon reaching 45.

Typically, when financial independence seekers like myself earn extra income, our instinct is to prioritize saving. We're conditioned to stash away most of our earnings for an uncertain future, often finding spending money to be a challenge. We constantly weigh the opportunity cost of spending for potentially greater returns.

For instance, receiving a substantial capital distribution in 2024 from a real estate investment I made back in 2017 served as a powerful reminder of the potential of investing. Each of these reminders makes it increasingly challenging to part with money. Invest more, make more, live a better life!

However, with a gift card, saving and investing the proceeds isn't an option. The money must be spent, or else the card will expire or be misplaced. So, if you want to encourage a frugal friend, loved one, or parent to embrace spending and enjoy life more, consider giving them a gift card and witness their delight.

For two weeks, I relished spending my gift card on items I might not have otherwise purchased. And for that, I'm grateful. Now it's back to saving and investing as much as possible to recover some of my lost passive income!

Reader Questions And Suggestions

How did you spend a gift card if you received one? Did your spending habits differ compared to if you were spending your own money? What are some other pros and cons of giving a gift card?

Perhaps even better than a gift card is giving the gift of education. Pick up a copy of Buy This, Not That, my instant Wall Street Journal bestseller. The book helps you make more optimal decisions so you can live a better, more fulfilling and richer life. 

For superior cash flow management, explore Empower, an exceptional wealth management tool I've relied on since 2012. Empower goes beyond basic budgeting, offering insights into investment fees and retirement planning. Plus, it's completely free.