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
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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!