Gift Cards vs. Allowance: How to Show Your Child the Difference
By Erik Nilsen · Kroni6 min read
A gift card and allowance can look like two amounts you just add together, but they don't work the same way. Allowance can be spent almost anywhere. A gift card can only be used where the card is valid, within the card's terms, and as long as there's money left on it. The clearest way to show the difference is to have your child put each amount in its own column and write down where it can be used, instead of adding everything up into one total.
Why kids lump the amounts together
To a child, "$25" is just $25, whether it's on a plastic card or in a wallet. That's perfectly logical. What your child hasn't seen yet is that a gift card has a limit built in. The value on the card is real, but it's locked to a specific store, chain or website.
The trouble starts when your child plans a purchase based on the total. At the checkout they may think "but I had enough money" and still not be able to buy what they wanted. It's easier to sort this out at the kitchen table than in the checkout line.
An example: $25 + $15 isn't always $40
Here's a made-up example. The amounts are only for illustration.
Ida (10) got a $25 gift card to a sporting goods store for her birthday. She also has $15 in allowance that her parents have been keeping track of for her. She wants to buy a $30 board game at a toy store.
Ida thinks: $25 + $15 = $40. That's plenty.
Here's what it looks like when the amounts are split up:
| Gift card | Allowance | |
|---|---|---|
| Amount | $25 | $15 |
| Can be used at | The sporting goods store (and its online shop, according to the card) | Almost anywhere |
| Can be used at the toy store? | No | Yes |
| Available for the board game | $0 | $15 |
So for the board game, Ida has $15, not $40. She's $15 short.
That doesn't make the gift card worthless. It just belongs to a different plan. Ida could, for example:
- use the gift card on something from the sporting goods store she wanted anyway, like a ball or a pair of training socks
- keep saving for the board game with her allowance
- check whether there's something at the sporting goods store she'd rather have than the board game
The point is that the choice is hers, based on the right numbers.
Check the card before you change the plan
Before you make a plan, find out what's actually left on the card and what rules it has. Gift cards vary, so look at the card itself, the receipt or the store's website. These are worth checking together with your child:
- Remaining balance. Has the card been used before? Many stores can check the balance at the register or online.
- Where the card works. One store, the whole chain, the online shop or a shopping mall?
- Expiration date. Is there a date on the card or in the terms?
- Change and leftovers. What happens if the purchase costs less than the card? Does the rest stay on the card?
- What the card can't be used for. Some cards have exceptions, so read the terms.
Write down what you find. Then your child doesn't have to remember it, and you don't have to guess.
How to do it this week
You don't need a big system. Three short steps are enough.
- Put everything on the table. Gift cards, receipts and whatever your child knows about their allowance.
- Fill in the worksheet below together. Let your child do the writing if they can. One row per gift card, with allowance in its own table.
- Match each wish to the right column. When your child wants to buy something, ask: "Which column can pay for this?"
For younger kids, two envelopes or two boxes can help: one for gift cards and one for allowance. Older kids can often work straight from the table and check the card balance online with an adult.
Copyable worksheet: "Where can I use it?"
Copy the tables below and fill them in. The blank fields are meant to be filled out.
Gift cards
| Card from | Amount left | Valid at | Expires | Notes |
|---|---|---|---|---|
Allowance
| Where the money is | Amount | Can be used at | Notes |
|---|---|---|---|
| Almost anywhere |
Things I want
| Item | Price | Sold at | Which column can pay? | Still needed |
|---|---|---|---|---|
Don't inflate the allowance balance
A common trap is adding the gift card's value to what your child thinks of as "my money." The balance then looks bigger than it really is, and your child may think a savings goal is almost reached.
If you use Kroni for your allowance agreement, it makes sense to let the virtual balance show only what belongs to that agreement: what your child has earned from chores and what you've agreed on together. The gift card can live on a separate sheet or in a note, with the store and remaining balance. Kroni isn't a bank and doesn't move real money, so payments and purchases happen outside the app either way. Only if your family deliberately turns the gift card into something else, for example an adult takes over the card and your child is owed the same amount under the allowance agreement instead, does it make sense to add it to the balance. That's an agreement you make yourselves, not something you have to do.
If you want to explain what a balance is in more depth, see Balance Explained for Kids: Goals, Mastery and Money.
When the gifts get bigger
Around the holidays, big birthdays or coming-of-age celebrations, lots of gifts can arrive at once, both cash and gift cards. That's when it really helps to keep them separate from the start. Cash can be split between saving, spending and goals. Gift cards should get their own rows with the store and expiration date, so they don't end up forgotten in a drawer. Read more about how families can divide up money gifts in Large cash gifts for kids: a family guide to spending, saving and goals.
What your child is really learning
Once your child has filled in the table a few times, asking "where can I use this?" can start to become a habit. It applies not just to gift cards, but later to reward points, punch cards and coupons too. The amount is one thing, and where it works is another. That's a useful idea to have in place before a first bank card.
Remember that necessary things, like clothes your child needs and school supplies, are still the adults' responsibility. A gift card to a sporting goods store shouldn't replace the shoes you'd have bought anyway, unless your child wants that and you've agreed on it together.
Frequently asked questions
- Can we just add the gift card to the allowance?
- That can give a wrong picture of what your child can actually buy. A gift card only works where the card says it does. Keep the amounts in separate columns, and only count the gift card when the item is sold at the right store.
- What if the gift card is for a store my child doesn't like?
- First check the terms, the remaining balance and whether the card works at other stores or online. Try to find something there your child will enjoy. If your family wants to swap the card for cash internally, that's your own agreement, and it's worth writing it down clearly.
- Should the gift card go into the virtual balance in Kroni?
- Usually it's cleanest to let the balance show only the allowance agreement and keep the gift card in a separate note with the store and remaining balance. Kroni doesn't move real money, so the gift card gets used at the store either way.
