Back in September our family got our very first family credit card. We did it to maximize the amount of interest income we would receive from our high yield online savings account and to earn back some of that hard earned cash. While I was expecting the income from our savings account to net us tens of dollars (tens!), I figured that the cash back rewards could possibly bring back hundreds of dollars into the family coffers. I did some research on what card might give me the best results and it boiled down to two - the Chase Freedom Credit Card and the American Express Cash Rebate Credit Card.
Each of these cards has its own set of advantages. The Chase card racks up the rewards quicker, offering 3% back on the three predetermined categories of spending in which you spent the most that month and 1% back on all other purchases made on the card. They also were offering, and still are by the way, a $50 cash back award for first time card user after your first purchase. When this is combined with their offer of redeeming $200 worth of rewards for a $250 check, it serves as a lucrative deal to users who don’t really charge that much to their cards.
The American Express, on the other hand, is made for big spenders. After charging $6,500 on your card you start accumulating an impressive 5% cash back on grocery, gas station, and drug store purchases, all while raking in 1.5% of every other purchase on the card. Unfortunately, the rates before reaching the $6,500 mark are a measly 1% and .5% respectively. So if you have big purchases planned ahead or you have a large monthly bill, the American Express card is definitely the way to go.
When I ran each award system against our monthly numbers back in September the Chase card just barely came out on top. The actual rewards earned on the Chase card were significantly smaller, but when you added on the additional bonus $50 dollar bonus for joining and the extra $50 they throw at you for waiting to reach $200 until you redeem your rewards the Chase card came out on top. So we went with the Chase card.
Since we started making purchase with it in early October we have spent $4,702 on our card and have earned $72 on those purchases according to our most recent statement (but when you include our extra $50 our current rewards balance equals $122). That represents a savings of 1.52% (3.65%) on our purchases. Not too shabby if you consider we had to make all these purchases anyway. I will count this a some nice additional income for the family.
After reading a ridiculous post over at My Dollar Plan about how they have a credit card balance of $223,270 I wanted to revisit this issue to see if we really had made the right choice in going with Chase. If they can make over $11,000 dollars a year on their credit card scheme I would sure like to make my card choice go as far as it can, since it is essentially free money if you can work the system right.
So I ran some numbers. At our current pace of shopping (about $58 a day worth of charges) we will save $422 dollars with the Chase card, including our two $50 dollar bonuses, one for signing up and the other for waiting to redeem until we reach a balance of $200 . With the American Express card I estimated that we would earn $386 given our current spending habits. So it looks like I made the right choice after all. I rock … or do I?!?
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Posted in Banks & Credit Cards ~ 1 Comment
In my goals for the new year I mentioned that I wanted to improve my financial tracking “software” and get it to the point where it knows where all my money is at down to the penny. To help all my avid and veracious readers know a little bit more about what I mean by that I figured I should probably give those phantoms a little bit of information about my awesome and awe-inspiring tracking arrangement.
What I Got
Practically on the day my wife and I got back from our honeymoon I built our first financial spreadsheet. It was simple and easy, and it gave me something to do at work when I got really bored that was both productive and useful. At first all it did was track when and how much we spent, but since then it has evolved into a fairly substantial system of interlocking sheets. In its current state we can:
- Record the basics: When, how much, and in what category each of our purchases occurs
- Analise our spending: Through the power of vlookup and hide I have summed each of our spending by category into a manageable mass of information that helps us see where we are at in our monthly budget, where our current pace of spending will land us at the end of the month, and how much we spend per day on each of our categories of spending.
- Track how our regular expense saving plan is going: We track how much we put into these “accounts” and how much we use from them in one manageable interface
- Get a bird’s eye view of our spending, saving, and giving: this overview worksheet is linked to each month and gathers all the pertinent data into one place where it is easily digested. Here I can see what types of spending trends emerge, create cool charts, and learn that we spend a little over 70% of our combined income on things that we absolutely can’t do without and that we save nearly 23% of the same (hurray for our side!).
What I Learned
In creating all this spreadsheet glory, which I am sure is surprisingly similar to very good and very time efficient financial software tools like Quicken (a.k.a. Boring-icken) - I already mentioned why I don’t use it here - I have learned a couple of things:
- Make it easy to automatically update things on your overview worksheet by making your monthly spreadsheet’s naming conventions easy. This not only includes the name of the file (2007.12_Income_Tracker), but also the name of each individual sheet (List, Categories, Funds). This means that all you have to do to add a new month to your master sheet is fill down last months information and do a replace on the month number to get that month rolling.
- Include plenty of space for your purchases on your basics sheet that lists all your purchases. This helps keep tinkering with that master sheet to a minimum.
- Make things as easy to see as you can. Your eyes are important for seeing things, make it easy on them.
What Needs to Change
It’s finally time to talk about my goals for improving what I have spent the last seven months building. I simply have to:
- Improve the look of the spreadsheets. There is clutter from a million edits and work-time rabbit trails that needs to be sent to the eternal black abyss where there are neither 1s nor 0s to code them.
- Improve spreadsheet accuracy. I used to know where every penny we had was, but then we got a credit card and it screwed everything up. Now I have to add numbers where I shouldn’t to make them accurately represent reality. I think I may have a working solution to this problem already figured out, but I’ll actually have to have real data to figure that out.
- Make analysis easier. I’m not really sure what else I can do, but the more I look at the numbers the more I see different ways to think about them. Besides, who wouldn’t want to make even MORE graphs. There freakin’ awesome.
- Make it SIMPLE, stupid. In my lust for spreadsheet magnificence I probably did things in a really inefficient or hacky way. In order to achieve this goal I have to overcome the self deception that the way it works now is great or I’ll have to combat my lack of knowledge about how spreadsheets can work. Both won’t be easy to defeat, the first because I don’t really make mistakes and the second because I don’t really need to learn anything new. I guess this goal is already 100% achieved!
So that should bring everyone up to speed on the important stuff about my spreadsheets. Maybe one day I will try and put up some samples so everyone can see just how spectacular they are for themselves.
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Posted in Budgets ~ No Comments
Since our goals for 2007 were to spend as little as possible, track every penny we spent, and have tons of fun doing it I figured we should have a much more robust goal system if I am to appear at all cool in any ones eyes. So here are my financial goals for 2008:
- While my spreadsheet system is something beautiful to behold, it could be even better! Master my own hodgepodge of spreadsheet madness that tells me where all my money is down to the penny (and figure out how sometimes I gain $0.00000000000071 when I add up all my expenses for the month!)
- Save $10,000 for the special goals I outlined here. While this only represents 40% of what we really want, I talked it over with Peyton Manning and he helped me be a little more realistic about what we could accomplish. Thanks Peyton!
- Stay within our family budget for the entire year. I’m not so concerned with being within budget each month, just as long as it all works out in the end.
- Earn $100 of additional income with which to spoil my wife rotten.
- Increase our net worth to $40,000.
Only a global warming catastrophe that would bury our home, bank, and city in a warm, rising ocean can keep us from our goals now!
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Posted in Money Management ~ No Comments
