On January 11th, I received an email from Chase Card Services telling me that my 2014 year-end report is available. I blew it off right away figuring it was just an overview telling me I spend a certain percentage of money on this, this, and that. Last night I was cleaning up my email and decided to take a look at it. I was quite surprised for two reasons. 1. They had the break down of actual dollars and cents spent each month and for different categories such as food, automotive, travel, entertainment and so forth. 2. The amount of money we spent was almost appalling.
A few months ago we decided to get a Credit Card together. We both had credit cards, just not a joint one. Many of our family members use credit cards to earn points towards airline tickets and that is what we wanted to do. After much research, we decided on the Chase Sapphire Card. They had a bonus incentive of 40,000 points for spending $3,000 in the first 3 months. You also earn 2 points per dollar spent on travel and food and one point per dollar on everything else. I believe the interest rate is 16% however, we planned to put all of our daily spending on it and then pay it off each month; which we have. We haven’t spent a single dollar on interest since we received the card in September.
So, we have had the card for 4 months. You are never going to guess how much money we have spent. Keep in mind, we do charge bills such as cable, internet, Netflix, etc to it. We just don’t use it for our debt payments. In this time period we went on our honeymoon, I had a two-week work trip where I was traveling and eating out, and we had Christmas vacation and Christmas gifts to buy. Oh, we also moved into a bigger place where I found it necessary to buy more decorations.
I contemplated whether I wanted to make the amount public because it is much more than I expected. But, I figured it is a good baseline for comparison and you already know how much debt we are in anyway so here goes nothing.
Drum Roll Please
There you have it folks… $15, 654.26. In 4 months! Is that normal? Or do we have a spending problem?
That is also the category breakdown. Later in the document it breaks down every single transaction and puts it under a category. It is not 100% accurate. For example, all of our honeymoon expenses were placed under the shopping category for some reason.
Some categories I would like to list the amount for the baseline reference.
This takes into account all Target purchases which is where we purchase toiletries, cleaning supplies, and clothes among many other things. Therefore, this number is not super accurate, but a good reference number nonetheless.
Many categories fall under this such as furniture, the computer the hubby built, department stores, any transaction on base which could be anything from food to uniform needs, cleaning supplies etc.
This number is horrible. I can’t wait to see what the number is in a four months from now since we started budgeting.
To Charge or Not?
All of this information was a great lead into whether or not getting rid of credit cards in essential. I mentioned before that Dave Ramsey says to get rid of them all; who cares about the points? Well, those points paid for our plane ticket for Christmas vacation. We never paid a single dollar on interest. However, we did overspend and I think that is a huge part due to having the credit card. When we use our debit card, we know how much is in the account and once we spend it there is no more spending.
I am torn on what to do. I like the money being taken directly out of our checking account but I do like earning points. A free flight is a free flight. I will probably do a test trial with each method; try using just cash, using debit card, and using the credit card. Then I will see what method I think works best for monitoring our spending.
What do you guys do?