How do you budget with Credit Cards/Rewards?

[wutamess]

OK, I've been distributing my budgeting spreadsheet to the world for YEARS. I'm now buying into the the Credit Card Rewards craze but can't for the life of me find out how to structure my budget around it.

My budget is broken down weekly:
- Net income
- Itemized Expenses
- $ left over

Those itemized expenses could be like,
- Water Bill
- Fuel
- Food etc.
When I enter something for that expense it keeps a running total on a yearly projection sheet.

If I'm now paying a lot of that via the CC, how do I keep track of where money is going in my budget? Anyone use a similar system? Attached is a budget template I give for people at the end of every year to help you get a sense of what I'm describing.

Anyone dealing with a similar problem or using something that works for them?

[DaFace]

Is there a reason you couldn't treat the credit card transactions like any other cash purchase? In other words, you ignore the credit card payments you make (treating those just like a transfer between bank accounts) and instead just focus on the things you buy as expenses. That's how I think of it.

[mikeyis4dcats.]

what DaFace said. Money is money, whether cash or credit card.

[Fansy the Famous Bard]

I buy what i wanted, then make the minimum payments until the end of time.

[Unsmooth-Moment]

Spend less $$ than what you make. Then pay it off at the end of the month. This is what I've done without budgeting very strictly. I use credit cards for every purchase I can, but always pay them off each month.

[eDave]

I run a pretty detailed budget spreadsheet, layed out like you describe.

I charge everything I can to a CC that rewards. Pay in full each month, reap the rewards. I take them as account credits. 2%.

I don't include the 2% on my budget. It's just loose money. $40 - $50/month.

[siberian khatru]

Is there a reason you couldn't treat the credit card transactions like any other cash purchase? In other words, you ignore the credit card payments you make (treating those just like a transfer between bank accounts) and instead just focus on the things you buy as expenses. That's how I think of it.

That's what we do with our AmEx rewards card. It has virtually replaced our debit card. We just put every purchase on that (groceries, gas, clothes, restaurants, etc.), immediately pay off the transaction as if it had come from our checking account, and pocket the points.

[Why Not?]

That's what we do with our AmEx rewards card. It has virtually replaced our debit card. We just put every purchase on that (groceries, gas, clothes, restaurants, etc.), immediately pay off the transaction as if it had come from our checking account, and pocket the points.

Same. We try to go 50/50 in between our Hilton Honors AmEx and Southwest Airlines Visa. Basically just by paying bills and grocery shopping, we never have to pay for flights or hotels. Pretty cool.

[El Jefe]

what DaFace said. Money is money, whether cash or credit card.

This. I have used and abused credit cards since I was just out of high school. I worked full time and went to school full time, I graduated from a private college with a BBA, and 0 debt. At the beginning of each year, I would apply for a 0% interest card (if I didn't already have one) and I would put tuition on it, and I would pay it off before the 0% interest ran out. There was maybe 2 quarters where I did not take more than 1 class, just so I could throw more money at my student loan debt.

I have used PNC Everyday Rewards for the past 5-6 years, and I have abused that card, every time you get up to $100.00 in rewards, they mail you a check. Currently I have $357.48 (I think) that I can redeem whenever. I have used my cash rewards mainly to stock into my retirement, and my daughters 529. I have had to use it a couple times to apply towards unforeseen bills. I have yet to pay interest on a credit card in the decade I have been using them, God willing some catastrophe or major medical issue doesn't arise, but I hope to keep that streak running.

[wutamess]

Is there a reason you couldn't treat the credit card transactions like any other cash purchase? In other words, you ignore the credit card payments you make (treating those just like a transfer between bank accounts) and instead just focus on the things you buy as expenses. That's how I think of it.

The budget attached is designed to show me where my money is going. I know I did a horrible job of explaining things. But if I track the CC purchases as well as my regular itemized expenses, I'd have a CC payment in the budget which would basically double everything.

One thing I guess I could do is, NOT account for my CC payment in the budget. That could work but I was hoping there could be some type of other way around it that accurately paints the picture in a spreadsheet.

[Buehler445]

The budget attached is designed to show me where my money is going. I know I did a horrible job of explaining things. But if I track the CC purchases as well as my regular itemized expenses, I'd have a CC payment in the budget which would basically double everything.

One thing I guess I could do is, NOT account for my CC payment in the budget. That could work but I was hoping there could be some type of other way around it that accurately paints the picture in a spreadsheet.

Are you reconciling to cash? If so, treat it like another cash account that has a negative balance. If not then don’t record the cash payment to cc

[wutamess]

Are you reconciling to cash? If so, treat it like another cash account that has a negative balance. If not then don’t record the cash payment to cc

I know that's a simple 1st sentence but I have no idea what that means for some reason. :)

[Buehler445]

I can’t open your spreadsheet on mobile. I’m not being intentionally obtuse.

[Buehler445]

I know that's a simple 1st sentence but I have no idea what that means for some reason. :)

Do you take your bank statement and tie your beginning and ending cash balances or do you just enter the amounts that hit the account and stick them in an expense account (or classify them)

[Amnorix]

The budget attached is designed to show me where my money is going. I know I did a horrible job of explaining things. But if I track the CC purchases as well as my regular itemized expenses, I'd have a CC payment in the budget which would basically double everything.

One thing I guess I could do is, NOT account for my CC payment in the budget. That could work but I was hoping there could be some type of other way around it that accurately paints the picture in a spreadsheet.


Well, CC purchases are two separate categories -- WHAT YOU BOUGHT, which is useful for budgeting, and HOW you paid for it (CC or cash), which isn't. If you buy gas with a CC, you are buying GAS. You aren't buying some credit card thing. The CC is just HOW you pay for the thing you bought.

[DaFace]

The budget attached is designed to show me where my money is going. I know I did a horrible job of explaining things. But if I track the CC purchases as well as my regular itemized expenses, I'd have a CC payment in the budget which would basically double everything.

One thing I guess I could do is, NOT account for my CC payment in the budget. That could work but I was hoping there could be some type of other way around it that accurately paints the picture in a spreadsheet.

Yeah, that's exactly what I'm suggesting. If you think of a credit card as nothing but a checking account that is allowed to carry a negative balance, it should simplify things for you a bit. The payment to the credit card is nothing but an account transfer.

[eDave]

Well, CC purchases are two separate categories -- WHAT YOU BOUGHT, which is useful for budgeting, and HOW you paid for it (CC or cash), which isn't. If you buy gas with a CC, you are buying GAS. You aren't buying some credit card thing. The CC is just HOW you pay for the thing you bought.

Exactly. Most things I put on my CC are accounted for in my line item budget. CC is just the payment method and irrelevant.

What I don't track is entertainment, and misc. spends. Don't really care to budget that as I don't have too. Entertainment includes my weed.

[wutamess]

Do you take your bank statement and tie your beginning and ending cash balances or do you just enter the amounts that hit the account and stick them in an expense account (or classify them)

Tie it all together. So one expense changes the entire spreadsheet for all months and that expense item is added to the overall total in the summation worksheet in the front of the SS. Hopefully that answers your ?

See the jpg's attached.

[wutamess]

Well, CC purchases are two separate categories -- WHAT YOU BOUGHT, which is useful for budgeting, and HOW you paid for it (CC or cash), which isn't. If you buy gas with a CC, you are buying GAS. You aren't buying some credit card thing. The CC is just HOW you pay for the thing you bought.

I totally get that, my goal is to not get happy and not be able to track my actual available funds just because I'm using the CC for things. I'm also thinking of paying the balance off at the end of every week so there will be no surprises.

[wutamess]

Exactly. Most things I put on my CC are accounted for in my line item budget. CC is just the payment method and irrelevant.

What I don't track is entertainment, and misc. spends. Don't really care to budget that as I don't have too. Entertainment includes my weed.

That's the thing... I track EVERYTHING.

[dj56dt58]

I would just do what you are doing..you are tracking your expenses..your credit card is your payment method not an additional expense as long as you aren't being charged cc fees/interest

[BlackHelicopters]

I pay EVERYTHING possible with my Discover CC. I usually get one bill a month, plus Discover . All electronic. No paper bills. Cash back accumulated in 2018 is currently $1000. Going to put it toward holiday vacation. Should have $3000 by December.

[Buehler445]

Tie it all together. So one expense changes the entire spreadsheet for all months and that expense item is added to the overall total in the summation worksheet in the front of the SS. Hopefully that answers your ?

See the jpg's attached.

Ok. So you’re not reconciling to cash.

I’d just not enter the CC payment on your bank statement. What are your rewards? Are they cash? If they are, then you’ll have to dig that out of the statement they are applied to and back that out of miscellaneous or whatever. If they are applied to a specific purchase just make the purchase cheaper in your spreadsheet. If you want to calculate the return of your CC you’ll have to make a separate account for it and manually add to it or pull it out when they are applied or earned.

[Dartgod]

Tie it all together. So one expense changes the entire spreadsheet for all months and that expense item is added to the overall total in the summation worksheet in the front of the SS. Hopefully that answers your ?

See the jpg's attached.

Not what you were asking, but you can start buying your kids some lunch with those reward bucks your going to be earning.

[Ming the Merciless]

I wouldnt even think about it like that....

if youre funneling everything through a CC, just keep everything in your budget in the proper categories

No need to itemize whether if it flows through CC or not, especially if youre paying the CC off every month

I would just add 'cc payment' for any credit cards you havent paid off....but the ones youre cycling through them are essentially cash anyway...

Unless I am not understanding your question correctly

[Ming the Merciless]

I would just do what you are doing..you are tracking your expenses..your credit card is your payment method not an additional expense as long as you aren't being charged cc fees/interest

this.

full stop.

thats what I do...CC is _NOT_ an expense unless YOU let it be

its just a method of payment....

if you do allow a CC to have a balance, and it becomes an expense...then you add it into your budget at that time

[Iczer]

I guess to piggyback on this thread a little. What credit card do you guys use for rewards?

I'm using capital one venture. I get 2 miles for every $1 spent. However It's $95 a year after the first year. Is there a better card I can get for rewards for like vacations with no annual fee?

[wutamess]

Ok. So you’re not reconciling to cash.

I’d just not enter the CC payment on your bank statement. What are your rewards? Are they cash? If they are, then you’ll have to dig that out of the statement they are applied to and back that out of miscellaneous or whatever. If they are applied to a specific purchase just make the purchase cheaper in your spreadsheet. If you want to calculate the return of your CC you’ll have to make a separate account for it and manually add to it or pull it out when they are applied or earned.

Reward is Southwest airline points. Not cash. No additional calculations needed.

[wutamess]

I wouldnt even think about it like that....

if youre funneling everything through a CC, just keep everything in your budget in the proper categories

No need to itemize whether if it flows through CC or not, especially if youre paying the CC off every month

I would just add 'cc payment' for any credit cards you havent paid off....but the ones youre cycling through them are essentially cash anyway...

Unless I am not understanding your question correctly

You got it right! That's exactly what I'm going to do. Just needed to hear someone else's logic with this.

[wutamess]

I guess to piggyback on this thread a little. What credit card do you guys use for rewards?

I'm using capital one venture. I get 2 miles for every $1 spent. However It's $95 a year after the first year. Is there a better card I can get for rewards for like vacations with no annual fee?

I have a Southwest Airlines Business card. Got 60000 points on it for putting $3k purchase on it within the first 3 months. $99 annual fee, 1 point for every $1 spent. 2 pts for every Southwest hotel, flight or car rental purchase. I think you get like 10k points annually as well.

Using THOSE points to book my flight to the Mexico MNF game.

[DaFace]

I guess to piggyback on this thread a little. What credit card do you guys use for rewards?

I'm using capital one venture. I get 2 miles for every $1 spent. However It's $95 a year after the first year. Is there a better card I can get for rewards for like vacations with no annual fee?

You generally get what you pay for. Some people can get great value out of the Sapphire Reserve card despite the $425 annual fee.

I think Venture is one of the best all-around cards. If you don't want the fee, you could downgrade to the VentureOne card, but it's only 1.25%.

I personally use an arsenal of:

Citi Costco card for gas (4%), restaurants (3%), and travel (3%)
Chase Amazon card for Amazon purchases, which I do a lot of (5%)
Discover It card for rotating categories of good stuff (5%, but on what depends on the quarter)
Venture for everything else (2%)

[eDave]

Discover It is cool.

Q1: Gas Stations & Wholesale Clubs
Q2: Grocery Stores
Q3: Restaurants
Q4: Amazon.com & Wholesale Clubs

You'll get matched reward points for the first year too.

I have this and Venture.

Curious, is the Costo gas reward just at Costco filling stations?

[DaFace]

Curious, is the Costo gas reward just at Costco filling stations?

Nope. Works anywhere except gas stations attached to grocery stores. The card is free if you have a Costco membership, but not sure it'd be worth it if you weren't a member already.

[eDave]

Nope. Works anywhere except gas stations attached to grocery stores. The card is free if you have a Costco membership, but not sure it'd be worth it if you weren't a member already.

Sweet. Double that up with my grocery rewards ($.10 off/gal.) and gas is only $2.85/g!

[Ming the Merciless]

I guess to piggyback on this thread a little. What credit card do you guys use for rewards?

I'm using capital one venture. I get 2 miles for every $1 spent. However It's $95 a year after the first year. Is there a better card I can get for rewards for like vacations with no annual fee?

I use ALaska Airlines (visa)...for a couple reasons ...

They have some awesome rewards, primarily vacation based that forces me to take time off. (go anywhere for 99$ etc...free flights type of stuff)

The small town that I live in actually has alaska airlines servicing the small airport (I live in santa rosa) ...and so they go to places like LA, san diego, Vegas, seattle...etc...and I can connect from my own town to anywhere basically...which i love for convenience...because basically in santa rosa you can stay at the bar until pretty much right before the flight...and parking / check in is way better than SF

Also, alaska has some non-stops from SF bay area (where I live) to Hawaii and even the island of Kauai which is where my family usually goes every year on vacation....


All that being said, if you do live by a costco the costco visa reward program is amazing and if I didnt love the alaska program I would funnel everything thru costco's visa reward.

If you live by an alaska airlines serviced airport or by a costco i can tstify these two programs are bad ass

[R8RFAN]

Life is simple, spend less than you earn

[Infidel Goat]

Citi Costco card for gas (4%), restaurants (3%), and travel (3%)
Chase Amazon card for Amazon purchases, which I do a lot of (5%)


I use those two and for my third card, I use the American Express Blue Cash Preferred. (6% on first $6,000 at a grocery store). That's $360 per year (though it has a $95 fee).

[Buehler445]

Reward is Southwest airline points. Not cash. No additional calculations needed.

Right on. Just take the expenses from your CC and put them in your spreadsheet. Disregard the payment from your bank account to the CC

[DaveNull]

the budget app I use handles it like the credit card is just another bank account. you budget your income and if you buy something with the CC, the cash budget line item goes down by the amount you spent and the credit card payment budget goes up.

You see that you've already spent the money and after a month or two you don't even notice what amount you're paying off on your credit card because that payment was budgeted for the moment you bought the new thing.

[wutamess]

This is freaking MTF OUT! I liked going back every week and my budget is synced with my bank account. Now charges wont even show onto my CC statement for days and I'm in the loop with how much money I actually owe.

Budget is all out of whack! No one has found a simple solution to track both more "handily"?

[DaFace]

This is freaking MTF OUT! I liked going back every week and my budget is synced with my bank account. Now charges wont even show onto my CC statement for days and I'm in the loop with how much money I actually owe.

Budget is all out of whack! No one has found a simple solution to track both more "handily"?

Sure. It just seems that you don't like how the rest of us do it. :shrug:

[wutamess]

You guys way is to track expenses the same whether they're on Bank card or Rewards card.

It's confusing because the running totals now aren't syncing on my budget. I want my budget to match what's in my bank account after I get done paying off the CC. For some reason it's not and it's too confusing itemizing and syncing both places, especially when my budget totals aren't correct.

I'm going to go into deep hibernation mode on this one.

[TribalElder]

I enjoy 1% in 1% out

Try to payoff in full semi monthly