Credit Card Enlightenment: Track Your Expenses Wisely

I've decided to start a new series entitled, “Credit Card Enlightenment” revealing a portion of what I spend on a monthly basis from my personal credit card and any enlightenment that is found through the analysis. All of us should have at least one rewards credit card to earn points and miles.

The economy is opening back up! Time to enjoy the YOLO Economy to the maximum!

This monthly series will be a good way to track expenses and keep things from getting out of control as peripheral income grows.  In other words, tracking credit card expenses is one way to battle lifestyle inflation.

The use of credit cards is critical in the way I spend.  I buy items with confidence knowing that I have 30 days interest free to pay it off.  I also like how credit cards provide reward programs and buyer protection in case of product dissatisfaction and fraud.  Finally, I do not like carrying much more than $80 in my wallet.  Credit cards are easily replaced if my wallet is lost or stolen, whereas cash is usually gone forever.

Besides my mortgage, my credit card is my largest monthly expense.  I own three cards: a corporate card for work, a corporate card for my online business, and a personal card.  The discretional spending really comes from my personal credit card, hence this card is what I will focus on in this post.  I try and put everything other than business expenses on my personal credit card because the credit card tracks all my expenses, provides free financing, and produces rewards points.


11/30/11Farmer's Market$13.78
11/27/11iPhone App$2.99
11/23/11iPhone App$0.99
11/13/11Grocery Item$2.00
11/8/11No Idea!$690.50
11/7/11Wireless Equipment$62.29

My goal is to spend $1,500 or less each month on average.  $1,500 is the normal monthly operational costs, which excludes big ticket items such as the two week cruise.  Did you notice the line item that says, “No idea!”?  I don't recall charging such a large amount on anything since coming back from Europe, so this mystery charge is quite alarming.  If one excludes the $690.50, I spent around $1,000 for November which is in the ball park.

As you can tell from the entries, my largest expenses are food and tennis.  It's not a surprise since I love to eat, and I play tennis three times a week on average.  My tennis club bill includes all food expenses, guest fees (I have a lot), and anything I buy at the proshop e.g. strings, grip, shoes, hats and so forth.  Tennis is part of my lifestyle that I love and can't do without.  There needs to be a balance with the mental (writing, work) and the physical.  I'm really not into spending money on clothes or other material items beyond what I need for sports and work.


Paying one's credit card bill in full every month is a must.  Credit cards charge some of the highest rates around, second only to perhaps payday loans and the black market.  My credit card interest rate is a ridiculous 10.25%, which is high given the 10-year yield is only at 2.37% as of June 2015.  My primary home mortgage rate is only 3.125%, therefore it's clear that my credit card interest rate is relatively absurd.  The good thing is that the high rate is all the more reason to always pay the bill in full every month!

I seldom ever look at the line-items in my credit card statement, only the total.  If the total is under $1,500 or right around there, I'm complacent.  If the total is much higher than $1,500, I eyeball the largest figures and figure out whether they are “one-off” or recurring and adjust my budget accordingly.  I've got to change this habit with this monthly credit card series post.

To help put things in perspective, I save 100% of each bi-weekly paycheck and about 20% of my second bi-weekly paycheck a month to target at least a 60% after tax savings rate for the year.  There is also a potential year end bonus I'm eligible for if the world doesn't come to an end.  Based on this math, you can calculate what I make a month at least, and draw your own conclusions about being frugal or excessive as this series goes on.  The online income I make is entirely separate, and would correspond with my online business corporate card.

average credit card interest rate


The enlightenment in this post is that I'm not as detail oriented with my finances as I thought.  After doing some research on what the $690.50 charge is, I confirmed that the charge was for a rental property appraisal as part of my refinance, which is reimbursable.  It's somewhat worrying that I couldn't recall what this relatively large charge was for.  It could mean that I either make too much to notice, or am lazy and don't really care.  I think I'm the latter, and also too trustworthy to believe all charges are legitimate and must be necessary otherwise I wouldn't charge it!

Furthermore, I realize that I spent ZERO in gas in November thanks to the sexy bus, while common expenses such as internet access and mobile phone usage are charged to my online business corporate card.  I also have a partner who alternates with the personal bills, such as groceries, cable, and utilities as well.  Hence, if I were to add up my personal credit card bill and hers, I would venture to guess we average $1,500-$2,000/month.

I encourage everyone to keep track of their monthly expenses in such a way that things are as clear as day.  We do the same exercise when we want to lose weight, there's no reason not to do the same thing when we want to control or reduce our spending.

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55 thoughts on “Credit Card Enlightenment: Track Your Expenses Wisely”

  1. Marissa @ Thirty Six Months

    I track everything in Wave and Mint and am attempting to keep my credit card usage under $800. That is the amount I have budgeted for utilities and gas and $100 discretionary purchases.

  2. Bill Hazelton

    After trying to budget with cash only (enveloping?), combinations of both cash and credit cards, my own personal experience has shown that using a credit card to track and manage expenses is FAR and AWAY the best, most efficient way to go. Setting aside the rewards, buyer’s protection, car rental insurance, etc., using a credit card to track and manage expenses is STILL a better way to go, from my experience. The key to it all is paying down the balance each and every month, no excuses, no matter what. If you don’t have the discipline to do that, the whole plan falls apart. Most people don’t have that discipline. Those are the same ball peens who believe that credit cards are “evil” because they don’t have the fortitude to grow a pair and pay their damn bill every month, no matter what. We haven’t paid credit card interest in years and the tracking and ability to download our statements into Quicken gives us an ideal way to hone in on those spending “blind spots”. Managing cash receipts sucks, plain and simple, and I can never effectively manage my expenses using cash. It’s never worked for me.

  3. We aren’t using credit cards at all because we are paying down debt. We are all cash now.

    I was surprised to see that you went out to eat frequently; for some reason I didn’t see that fitting your frugal lifestyle. :) However, as you are based in SF, my guess is that you still are being a bit conservative eating out. I imagine there are very expensive restaurants in your area. It’s good to see that you can save so much and still spend money on the things you enjoy; that is how it should be.

  4. Emily @ evolvingPF

    Hm, I’m a bit surprised that you can use your cc at the Farmer’s Market. Periodic visits to the farmer’s market are basically the only reason I carry cash! I’ve never seen portable swipe machines at mine or anyone paying with anything other than cash, but I go to a tiny market at my workplace.

    1. The SF Farmer’s market on the Pier is HUGE! It was voted by SouthWest Magazine as the #1 market in the country. CC is a must bc they often sell stuff like smoked salmon, trout, things in bulk for lots of moola. CC machines are everywhere.

  5. Thanks for the post. Interesting strategies by all.

    For our family of 3, we take the following approach (tweaks here and there)
    – $300 cash a week which pays for groceries, gas, lunches, eating out, the odd coffee etc. DW budgets pretty well. When she needs stuff like makeup, she’ll tell me we only have xx left for the week, so I’ll need to bring leftovers/sandwiches to the office.

    – utility bills, TV, internet etc (i.e. regular monthly “fixed” bills) all get paid by a single CC (earns FF miles), which gets auto paid from our bank account. I do review it, but since there’s only about 6 entries, it’s quick. That’s the auto pilot payments.

    – Then we have “splurges” ($ amounts set aside each month) – movies, nice restaurant meal out, massage get charged to the other CC which I review in detail each month. I like to make sure I have a receipt for each item which is then shredded.

    – one time expenses like insurance, educational expenses also go on the 2nd CC.

    CC gets paid in full each month. No idea what APR we have, but we get miles and cash back, with no annual fee. Haven’t paid a penny of CC interest in several years ever since we had a huge wake up call w.r.t money. Shame it took us so long to get financially savvy.

  6. Simple Rich Living

    I do the same in terms putting everything on my credit card. I find it’s easier to keep track and get points as a bonus. I only pay cash when I absolutely have. There are times I go out with a group of friends and we get one bill at places such as Chinese restaurants where they don’t normally split bills for you, I pay cash same as everyone else in the group. Though there were so many times I wanted to grab everyone’s cash and pay with my cc to get more points; I have not done that, I felt never quite right about doing it but I do intend to overcome this and do it in the future.

  7. Purchasing everything on credit cards really make it easier to follow up and check on yourself. I like what you are doing, it is great to have stuff like this to make us look back at our own credit card bills.

  8. Although it’s almost impossible not buy necessities on credit, I try to spend cash more often because it helps me to budget. When I take $500 out of my bank, I know exactly how much Is taken out and it helps me limit my credit spending. $500 is usually just about right for groceries, gas, and out of the house meals. Therefore, I don’t need to carry all of it with me, either.

    1. That makes sense too. I just don’t like carrying wads of cash, and I like my points and simplicity of using a card.

      I don’t budget that closely b/c I find it to be a downer on my lifestyle. If it’s in the ballpark, it’s good enough. No point making money if we can’t enjoy it and have to micromanage it.

  9. Wow Sam I love it! It provides a bit more transparency but not too much where I feel uncomfortable.

    Mind if I copy you starting in January?

  10. I keep track of what’s charged to my card as the items appear, if I don’t log into online backing and look at every transaction at least once a week I’m either dead or… well, dead.

  11. Jonah Oscam

    When I saw the (No Idea $690.50) I immediately thought, Sweet! His weed dealer must take square.

    1. HAHA! Now a personal finance post about the marijuana market in California would be pretty interesting. Comparing the product and value of the black market vs legal business would make an interesting case study!

  12. I review my credit card in detail because I have found errors or unauthorized charges that are small enough to squeeze through. I generally have a total in mind relative to a spending limit, but there are exceptions such as an annual bill. BTW, $690 is a pretty big mystery amount! People who commit credit card fraud will charge just a dollar as a test. That is one of the reasons I check my bill in detail. It takes less than 30 seconds.

  13. Not really – we budget weekly so I tend to pay off my card every week except for large expenses which I leave till the end of the month. $2500 is kind of our “doing good” budget for the month, including rent and all costs, but I haven’t revised that at all since we moved to a more expensive place.

  14. It was nice to see that I am not the only one going out quite a bit. :-) I am styaing away from charging to my c/c any expenses except those when we run out of cash (yeah, doesn’t sound good.) There is awlays a big temptation for me to NOT pay it off at the end of the month.

    1. Charging until you run out of cash is a good practice!

      Having the temptation to not pay off the CC bill is foreign to me bc the interest rate is so relatively high I dont want to get robbed!

  15. When we charged everything on the credit card a few years ago, the target was under $1,000. We probably go over that 50% of the time. :) Now, I try to use cash more. I also check every charges now and follow up on any mysterious charges.

  16. Near my house is a park with lighted tennis courts. Entry fee to the park is $3 during the week, unless one has a yearly pass. It amazes me how often I go and I’m the only one at the park. I guess the $3 is too high and drives a lot of people away. And even the lighting on the courts are free, discounting the entry fee.

    When you make it down this way Sam, let’s hook up and play some tennis. I’m in North Orange County area. Or how bout this, golf during the day and tennis at night?

    1. Sounds good Mike! What level are you USTA?

      The tennis bill looks high doesn’t it? Part of it is due to the monthly club dues, and probably $60 is food, you know, a lemonade and club sandwich after a morning match lol.

      Playing on club tennis courts really spoils me to play on public courts. But of course I gladly will with friends.

  17. Sunil l Entrepreneurship & Personal Finance

    kudos to you Sam for containing cc expenses under $1,500, especially in SFO. don’t think i can ever do that. with that said, i do check the statements every 3-4 months and tick off every charge. i typically round all gas pump charges, restaurant bills, etc. to the nearest round figure. checking for outliers is much easier this way.

    1. Thanks, but I do have more expenses since I pay cash for 20% of my stuff, and the DH pays some bills too. I’m going to write a follow up derivative post on corporate cards.

  18. This is about what I do with my card – most of my bills come right out of the bank account, and everything else goes on the card. I used to try to keep it under 1500, but I realized taht was a bit too loose. In november it was under 700 – and Hopefully it will be in December also. I always see where most of my money goes before I send them a payment.

    1. Cool. I think more and more online banks have their own expense trackers now. I know Citibank just rolled out something. Perhaps your bank has done the same and no more need for Quicken, and perhaps many other budget type software!

  19. Untemplater

    I put almost everything on my credit card too. A lot of restaurants and lunch places only take cash in SF though so I use cash for those places and at the farmers markets. 1000 a month is a good goal if it includes most all of your expenses. I should find out what the interest rate is on mine out of curiosity. I haven’t had to leave a balance on it when the bill comes but it’d be good to know what the rate is.

  20. Thanks for sharing your personal bill with your readers. From what I can see, it would be very easy for you to achieve your savings goals if you were willing to make minor changes in your lifestyle, in particular the amount of times you eat out.

  21. I’ve only just started using my credit card for everyday charges since my debit card no longer offers rewards points (and I like my points!) So far, I prefer one card to the other since it categorizes my charges. Of course, I also keep track in Quickbooks so I’m probably over doing it. But I’d rather be safe than sorry!

  22. We look at our credit card bill in detail each month. However the best approach for us is to also total the categories to determine if we have stayed on budget. My goal is to do this once a month but it most often happens every two months.

        1. Let’s start by saying that we use our credit card for the many of our expenses so that we can maximize the “cash back” feature. Examples: health insurance, groceries, clothing, dr’s visits, gas, charity donations, auto insurance, etc. Our bill averages between $3K – $4k per month. The variance is due to when insurances hit or dentist office visits for all 6 of us, etc.

  23. Oh my, I would probably have a heart attack if my expenses were only $1000/month. Of course, my groceries, cell phone bill and a lot more go on my credit card, and I only see a charge of $2.00 on your bill (plus $13.78 at the Farmer’s Market). Either you guys eat very light, or you use a different card for other expenses? (Even oatmeal costs more than 2 dollars!)

    I do try to keep my credit card under a certain amount each month, but it can be a struggle. Family in from out of town last month (that was expensive), new car tires the month before, etc. We absorb any increases and pay it off every month, but with 3 kids, 3 cars, a 25 year old house, etc, I never know what will happen every month. It may seem like I don’t have much control of my expenses, and to a degree, I do not. I have money set aside for ‘surprises’, but I can’t plan out when they will happen.

    1. Lol! Are you saying my $2.00 Grocery Item bill (which I have no idea what it is) isn’t enough to feed a family for a month?! :)

      Where is my grocery bill I wonder! Must be on the DW’s CC bill, which I know is way less than $1,000/month.

      I do have a business credit card too though, but groceries aren’t there. I must have just bought groceries at the end of October and it lasted for a couple of weeks and we alternated. My grocery expense is around $80-$100 for two weeks usually.

      Thanks for pointing that out and comparing!

      1. I am glad you are not putting your groceries on your business card. :)

        My husband puts all business expesnses on our Amex blue cash and gets reimbursed. Love my end of year rewards.

        My typical credit card bill each month is around $4400. That includes many bills though too, not just charges. Considering I put about 2200 miles a month on my car and my husband drives about 1800 miles a month, a lot of that money is gas. (And a lot of other things.) If my kids were not in private school and travel sports though, my mileage would drop way down, especially since I work from home.

        When my kids are off the payroll, our expenses will be minimal.

        1. An interesting question then becomes what do you think your CC bill will be after the kids go to college? I assume the DH puts some on his personal CC too yeah?

          Once the kids are gone, you guys will be rolling in dough!!

        2. Everything goes on thes same bill for the two of us.

          I can’t imagine our credit card bill being over $1500 once the kids are moved out. The exception will be for travel though- I plan to do a lot of that.

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