I love money. Let me rephrase, I love managing money and I love taking about money. I must get this from my mother who is actually a bookkeeper. I don't actually like spending money but I'm probably one of very few people who actually enjoys balancing my checkbook. I like to track everything that goes in and everything that goes out. Three years ago, when I moved to Mississippi, my father gave me an excellent spreadsheet. It is extremely basic but has allowed me to track everything. I can tell you exactly how much I've spent on food, gas, rent, insurance, medical (for both Falafel and myself), and travel each month for the past 36 months.
Each month, around the first or so, I fill in the spread sheet based on my bank account and credit card accounts. This provides me an overview as to what was spent in each category every month. I use this information to see if I spent more on food this month than last or if I went shopping a little bit more so I can be more aware for the following month. For example, if I'm over budget on month on food, I know the next month, I need to cook more often. I'm sure there are applications offered by my bank but this helps me compile all of my accounts into one simple file. It does take some time to do this but as sick as it may sound, I find it to be relaxing. It helps me sleep better that night too.
I love credit cards. I use them as debit cards and always pay my balance in full at the end of the month. I refuse to pay to use them so I play their games and actually get paid to use my credit cards. If you use them right, you can rack up the points very fast. The Husband was scared at first to take on this task (as he's always relied on debit) but he's defiantly catching on. I use the term, credit cards (plural) because I use both a Discover and a Visa. Every quarter, each card offers 5% back on certain purchases. I take note of this and use the cards where it benefits us the most. My default card is the Visa because it gives back 1% on all other purchases and the Discover only gives back a fraction of that.
Let me break it down further. The first quarter of the year (January-April), Discover was offering 5% back on restaurant, cruises, hotels, airlines and car rentals (obviously following a travel theme) and Visa offered 5% back on grocery and drug stores. So the credit card of choice is dependent on which type of purchase. If I am at a store that doesn't fit into any of these categories (ie a clothing or department store) I just use the Visa. It's also nice to have two cards just in case your Discover doesn't work at Subway or your Visa is declined in El Paso during your wedding weekend (yeah, that happened and I almost didn't have a limo).
Well, I just finished updating my expenses and have decided to make some adjustments. We get a better exchange rate on cash than on the credit card. The ATMs are actually free here and our bank at home just charges a flat rate per transaction. The Visa offers a great rate of 3% (minus the 1-2% I get back) but the cash is still a better deal. However, with every decision, there is a trade off: I won't be able to track all of my expenses as well because, well, I HATE receipts. It's much easier to track where your money is going when you can follow it on a card rather than using cash everywhere. This option is cheaper by close to 2% and so, I think we will be using cash a little more often for now.
Until next time, here's a question I'd love to hear your responses to (you can leave your responses in the comment area below:
What tips and tricks do you use to keep track of your finances?
Cheers!
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