December is generally a higher expenditure month given the holidays and tempting sales galore. I would ideally like to keep my personal credit card bill in the $1,000-$1,500 range, with $2,000 as the upper limit. After $2,000, I feel like I'm wasting money because that just seems like an awful lot to spend on things beyond housing costs.
I decided to start tracking my monthly credit card expenses to mainly make sure there aren't any egregious fees that I know nothing about. For the past 10 years, all I've been doing is eyeballing the total amount, and if it was below a certain threshold, I would pay the bill and move on.
As my desire to save more money grows, it's good to be a hawk-eye when it comes to my second biggest monthly expenditure. Furthermore, as a personal finance blogger, why not make some content out of the figures and learn something in the process! Those who seek early retirement might want to give this exercise a go as well.
DECEMBER 2011 CREDIT CARD STATEMENT
|DECEMBER 2011 CREDIT CARD STATEMENT|
|Food||Fruits at grocery store||$14.96|
|Food||Brunch for two||$29|
|Food||Lunch for two||$31|
|Food||Lunch for two||$22.33|
|Hobby||Two Tennis Racquets & shoes||$549.39|
|Hobby||Private internet domain renewal||$12.17|
|Hobby / Business||Tennis and food with client (reimbursable)||$85|
|Hobby / Business||Tennis and food with client (reimbursable)||$65|
|Hobby / Business||Tennis and food with client (reimbursable)||$55|
|Insurance||Insurance for car, home, personal prop etc||$223|
|Merchandise||BR casual shoes 40% off (will return)||$75.90|
|Merchandise||Tod's work shoes 30% off, record amount||$315|
|Merchandise||Working clothes on sale for myself||$288|
|Misc||Walgreens shampoo, toothpaste, floss||$11|
|Total Net Of Reimbursements and Returns||$2,052|
Hobbies: Tennis is expensive. The cost of $549.39 is around 25% of my total bill. The two tennis racquet purchases are considered one-off since I play with the same tennis racquets for 3-5 years on average. I need two because I play competitively and strings break during matches all the time. In fact, I just broke two strings the other day while, which will cost about $80 to re-string since I can't be bothered to string them myself.
Transportation: Given I take the bus to and from work every weekday, my gas bill is relatively small at $67.88, despite Moose's V8 engine. If I didn't go up to Tahoe for a mini-snowboard vacation, I probably would have only spent about $10 bucks on gas. The snow has finally arrived, so I plan to go up this week and twice a month on average for the next three months.
Shopping: I went a little nuts (for my standard), shopping for myself given places such as Barney's and Banana Republic had 30-45% off sales. I really didn't spend money on anything I really wanted, just work shoes and clothes since they wear out e.g. socks, pants, shirts.
Food: From the 11 entries, it does seem like I eat out a lot. However, given you can eat out around 90 times a month, eating out 12% of the time isn't that bad is it? $130 a month for groceries for two is pretty good. You are only seeing a portion of my food bill since I'm constantly taking clients out for dinner and lunch as well on my corporate card. Combining business with pleasure is actually a great way to save costs. You've got to eat anyway, might as well build relationships with clients over a great meal. If you love to golf, you might as well take a client out golfing as well.
PUTTING THINGS IN PERSPECTIVE
I'd love to spend less money, but I'm not sure exactly where to cut. It does look like I eat out a lot, but in the scheme of 30 days and 90 expendable meals, I don't think my food expenditure is that much. Professional cooks are infinitely better and quicker at preparing food than I can.
For January and upcoming months, I won't be buying any personal gifts or clothes for myself. Hence, the upcoming credit card bills should go down by an average of $500. That said, I do plan a trip overseas and have budgeted about $1,000 for some tailored clothes. I also bought a last minute airplane ticket for vacation, so actually, February looks like it's getting up there as well!
In addition to my corporate card, I also have an online business credit card which pays for other expenses such as internet and mobile charges. If you haven't thought about starting a business, there are definitely some benefits that help subsidize your normal living expenses e.g. food, travel, electronics.
I spent about $300 in cash this past December, or about $70 a week on random things such as parking, tennis balls, snacks, and taxis. I try to carry as little cash as possible, since cash cannot be replaced and I get rewards points on my credit card.
Finally, I will continue to pay off the credit card bill in full and save 100% of every other paycheck, which equals a minimum of 50% savings of my after tax income for the year. If there is a year-end bonus, I will save or invest at least 90% of the bonus as well.
Wealth Building Recommendation
Manage Your Finances In One Place: One of the best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.
Finally, they recently launched their amazing Retirement Planning Calculator that pulls in your real data and runs a Monte Carlo simulation to give you deep insights into your financial future. Personal Capital is free, and less than one minute to sign up. Ever since I started using the tools in 2012, I've been able to maximize my own net worth and see it grow tremendously.
Updated for 2018 and beyond. Now is more important than ever to track your net worth because the easy money has already been made. I suspect uninspiring times until 2019-2020 as we've just gone through a 7-8 year bull run since the financial crisis. Refinance your mortgage, increase your savings, and watch your money like a hawk!
40 thoughts on “Credit Card Enlightenment: Hobbies Are Expensive!”
thank you for another informative post. i use 1 credit card and track my expenses biweekly. Reading your blog (my top 3 favorites) helps me to benchmark myself to other personal financial gurus in which i can always have room for improvement
Thanks for the kudos Hiro. It’s fun and challenging to aspire to something greater, and that’s what I hope some of my posts here inspire readers to do.
I’m interested in knowing more about your business lunches. I have two side businesses, one a blog I just started, and the other is coaching that I’ve been doing for a while. Now that I look back on last year, there were many meetings I had with friends/other coaches where there definitely were things discussed related to my business. Not sure if you play golf, but I’m assuming that can be counted too.
I’m planning on seeing a CPA this year for my taxes but still very curious.. thanks!
A business lunch is any lunch where you talk business with a potential client. It is totally legitimate and expensable.
Wow, Sam, this is like the most information and detail about yourself that you have revealed.. ever!
I like this type of post. It adds to the mystery of Sam, from Financial samurai.
$130 in grocery bills is pretty good, considering it sounds like you buy organic and go to the farmers market regularly.
Ha! Well, I thought it waould be somewhat interest to readers, and helpful to myself to keep things more transparent.
“Professional cooks are infinitely better and quicker at preparing food than I can”
My favourite line by far!
I try to tell my parents and friends this all the time, but no one takes me seriously.
I am glad you bought floss…it will reduce dental bills. Tennis is an investment, it will keep you in shape and cut down on medical bills later.
I charge everything possible on credit (for points) and the convenience of not having to go to the bank machine all the time. My average is probably between $700-$1200 depending on the month. December (and July and August) was definitely one of the more expensive months. My biggest category is usually (always) food…both eating and grocery.
I appreciate the fact that you share your monthly expenses. I think many sports related hobbies are expensive. Golf for instance. You can drop a quick $100 bucks for two people on green fees and a cart for a round of golf.
My current hobbies are thrift stores. I still get my retail therapy but for a little less.
It all adds up quick. My last credit card bill was at a record low of only $350 but its going to be probably double that for Jan which is more of my norm. I’m not spending much on non essentials as I’m not shopping. I’m traveling but I already paid for most of my travel costs last year. I didn’t realize tennis can be such an expensive hobby. It’s excellent exercise so it’s good that your hobby is also good for your health!
Take clients golfing, and it will therefore always be free!
It doesn’t seem outrageous to me (well… maybe the $300 shoes :) ). But if you are saving 50% of your income, kudos to you!
It’s definitely the most I’ve ever spent! I had to write a post about it and think about it for 3.5 weeks whether to return or not!
They are $460 after tax normally :)
Does my report make you feel good or bad? Guess it would depend on my income too yeah?
Yep, gotta a nice full post on the subject. Such a no brainer to combine.
Our cc bill was pretty good in December. We didn’t buy too many things and we already had a family gather in November. Your food bill is pretty reasonable. $130/month on groceries is very little. I don’t think you can cut much there.
I just switched credit cards to the new Chase Sapphire card, from my bank 1% back card to earn the $625 in travel. However, one thing I didn’t think about (and I should have given that I work with metrics and financial reporting) was the extra difficulty of not seeing my credit card at the same time I do my online banking. The all-in-one financial review (at least for the majority of day-to-day expenses) does have some significant value and timesavings for me. I plan to switch back to my old credit card after I get the required spending limit. So yes, time and convenience are things I’m willing to pay for.
My credit card in dec was a bit higher than normal because of a few things: car plates for the year, a suit for my wedding and a couple christmas gifts. There was also 2 short notice 1 way flights on there. Between the plane tickets, the plates and the suit, is about 55% of my total cc bill for december.
And your farmers market takes credit card? way cool!
Yeah man, all the vendors from cheese, to zuchini, to pumelos all take credit cards. They got the wireless hand held thingy.
Where you flying to again?
Sam it’s the food bill that you can play with. Maybe take your clients to a less expensive place.
Ah, these food items are all my own. My client food bill is much greater.
I’m totally nosy so I like seeing these types of posts. Also, they make me realize our restaurant/food budget is WAY! out of control. Brings me back down to reality.
Oh yeah? What is your restaurant/food budget curious to know?
I do spend a lot more, but that’s with clients.
My personal credit card spending was much higher than usual last month, roughly $1000. I spent $468 on Christmas gifts for my wife and treated myself to a new winter coat from Banana Republic as well as a backpack by Tom Bihn. Clearly, I did my part to stimulate the economy. :)
Clothing – $200
Breakfast and Lunch – $100
Entertainment – $24
Tom Bihn Backpack – $250
Mobile Phone – $70
Gifts – $468
Business (Non Reimbursed) – $15
My wife an I track joint expenses separately from personal expenses and those came in around $912, which is fairly typical.
Takeout – $43
CableTV/Internet – $80
Groceries – $239
Gifts – $104
Travel – $130
Entertainment – $40
Parking/Tolls/Gas – $200
Household – $76
We charge everything and pay off in full each month so we can accumulate points for travel rewards.
Nice breakdown. Good job stimulating the economy. America thanks you! Never heard of a tom Bihn backpack. Is that a designer thing?
I use my credit card almost exclusively for the frequent flier miles. My exceptions are Target (5% rebate) and Costco (rebate). As a teacher, I no longer have the opportunity to go out for lunch. My hobbies (bicycling) can add to the month’s expenses, however it is usually replacing bicycle gear or repairs/maintenance. My costs usually increase when we are going on amajor trip. This year, we are going to Venice, Italy to pick up a cruise. Airfare will be almost covered by the miles, but I have to pay for the taxes. I have to pay for the cruise in April. Depending on the timing, either April or May will be higher.
My December bill was routine because my wife spread out the holiday shopping over a couple of months. Actually my January bill increased thank to a car repair ($200). I expect I will add more because I need a more comfortable desk chair since I spend so much time on the computer. So far everything is planned for,without any surprises!
Awesome! We did that cruise last October and loved it. Go for Holland America lines 2 weeker. The food is great!
Those food bills really are expensive. I enjoy eating out but personally I wish I ate out a little less.
When you move away from San Francisco the professional chefs may not be as good and as fast :)
Eating out 12% of the time is definitely far from the worst but I’ve gotten to a point where most “professionally cooked” food is disappointing. And since I’ve switched to 4-6 small meals a day that involve a lot of fresh fruit I’ve noticed much lower costs for groceries, not to mention that cooking a couple of things can last all week. Mark Bittman’s books are full of great simple ideas.
Other than that I’d love to get down to your level of spending in some categories!
I looooove eating fruit for lunch and an afternoon snack everyday! Grapes, mangos, pumelos, apples, oranges, soursap, you name it.
Eat out every meal and you will have a low grocery bill!
I post my spending weekly on my Sunday Evening Post, so I like to see how other’s are spending their money. Though for me, it’s mostly a way to keep me accountable and keep track of where our money is going, though I do leave out bills and expenditures that are specifically saved for, like C’s classes and books.
But if posting this information isn’t doing anything for you, then I would say stop doing it.
I was hoping to get a bigger epiphany in this post, but all I realized was that tennis is not cheap, contrary to what I thought. $500+ is a lot! I’ll check out your Sunday evening posts as well.
My credit card bill for December was about $4,000 but that is because I was on vacation for the whole month.
We are ussually pretty frugal but we spent 3 nights in Singapore and the hotel was about $200 a night and 6 nights in Kuala Lumpur were the hotel was about $125 a night. We also stayed at an upscale resort for 3 days earlier in the month.
My average credit card charges are probably about $1,200 a month – I charge everything possible – including all food shopping.
Sounds like you had a lot of fun! Pics? Start a blog?
KL is so cheap. Still $99 at the Ritz? Where did you stay in KL and what did you do? It’s one of my favorite cities. Roti Canai, chicken satay, and mee goreng!
I enjoyed your post – mainly because I guess I’m a bit nosy and like to know how other people handle their lives and finances – after all – I might learn something from them!
We are cash people ourselves. We use credit cards for trips, online purchases and unplanned stuff when we are out and about and don’t want to use cash… My December bill was about $200 and we pay off all cards with each statement so we never pay interest or fees.
It sounds like you are doing great at saving if you are able to put away every other paycheck.
$200 is so little! Well done. How much cash do you think you spent?
I typically put hardly anything on credit cards these days. I’ve been using my PerkStreet debit much more frequently since I find it’s easier to track my accounts when I’m not using credit. I just like to know how much cash I have available and not worry about debts that I owe on cards.
I think this kind of post is interesting! But then again, I always anticipate the end of the month because I get to check how I did with my spending. I’d say that eating out is one of the easiest ways to cut back. If you made meals at home and ate leftovers (which is just as easy as eating out), you’d save tons.
It would be such a shame to eat my horrible home cooking with hundreds of the best restaurants in the country all within a 7 mile radius! I think if I lived in Topeka, I could eat in a lot. Not in SF or Manhattan.