In Budgeting, Debt, For Beginners, Money

The Credit Card Lesson of the Day: Keep your receipts!

So I think I may have mentioned this some time before, but my unusual-but-effective way of paying my credit cards each time I pay with it goes a little something like this:

Buy something for $5 on my credit card.

Go home.

Log it into my budgeting tool to track my expenses.

Log online and pay the $5 immediately towards the credit card.

I have been doing this since I got my first credit card at 16, and I have never paid a red cent in interest, nor have I ever forgotten to do so before being charged for my mistake.

The rare problems I encounter are all because I’m human and I make mistakes:

  • I forget which card I used so I pay to the wrong card — happens once a year
  • I transpose the numbers and pay 7.89 instead of 7.98 — happened once
  • I end up getting cash back in the store, so I pay the wrong amount — rarely happens
  • I think I already paid the amount, so I don’t pay it — happened for the first time today!

FORGETTING TO PAY FOR ONE ITEM

So what happened is we were shopping at the same store, but I was buying something for the common budget (our household budget), and something for myself.

I took two receipts so I could enter them separately and not deal with the hassle of calculating taxes.

When I got home, I logged in what I thought were all the expenses, but I totally forgot that I had two receipts from the same store.

I had only logged one amount, but not the other.

When I combed through my credit card statement today (as I always do, once a month), I copied all the transactions into Excel, went through and deleted all the cells of the matching debits and credits (a.k.a. charges and payments).

It kind of looks like this when I go through in Excel. Each matching cell has a store charge, and a payment to coincide with it.

Clearing-each-expense-on-my-credit-card


If I am off by even ONE PENNY, I can tell.

It also makes it easier to find out where I went wrong, if I don’t see a matching payment.

I was left with almost empty cells, except for that one transaction (not pictured above), I forgot to enter because it was two receipts from the same store.

Without my tracking system and credit card paying method, I never would have caught my error.

I was dumping out all my receipts onto the floor, searching for all the ones from that store, and I was about to call CIBC and scream “FRAUD! FRAUD!!!!” with a pitchfork in my hands, and fire in my eyes, but thankfully, I came out of it without any egg on my face.

Frankly, it’d be easier to pay everything in cash or with a debit card, but credit cards give me back 1% in either cash or grocery points, and … well, 1% is 1%, considering how much I spend per year for myself and my business.

How do you deal with credit card payments? That is, if you use them?

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Sherry of Save. Spend. Splurge.

Millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. Since then, I have paid my $600K home in cash (my half was $300K), my $180K casr in cash, worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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16 Comments

  1. suzi

    I keep all my receipts in an envelope labeled with columns for itemizing; groceries, eat out, gas, pet, gifts, household, personal care, & extras. Extras would be clothes, liqueur, trips, etc. Each month has an envelope, and I total all my columns each month and then I really look at them. Once I’ve done that, I file them. If I ever need a receipt to refer to, or return something, I know right where to find it based on what’s written on the envelopes. I check my cc statement online about once a week, or so, just to make sure it’s legit, and I pay my balance in full about a week before it’s due. I’ve only forgotten to pay my card on time once so far. I think I like the idea someone had to sign up for an auto pay for the card I use all the time, should I ever forget to make a payment on time again. I use one main card for mostly everything to get flight miles, and a couple other cards so I can get free shipping/returns, and bonus points from certain retailers ordering online. Otherwise, I’m a cash paying freak for many of my daily (groceries, gas, eating out, hair cuts, etc) expenses. When I’m out of my set amount of cash, or running close, I quit buying stuff. This is how I rarely go over my monthly budget. If I’ve charged something big (trip, expensive clothing or gift, car repair, etc) I don’t put anything else on my cc until it’s paid off. It’s a rule I have. I will allow 2 or 3 months to pay off a purchase if I’ve deemed it worth it, but I just know there will be no more purchases on that card until it’s paid off in full. How I roll, and for the past 10 years, so far so good!

    Reply
    1. save. spend. splurge.

      I stuff all my receipts in my wallet, go home, enter them, pay each one, then shred them. My partner thinks I’m a freak. 🙂

      Reply
  2. Jenn

    I have two credit cards. One that’s just for me and one I share with my bf for common expenses. I go through my statements online weekly or more, depending on what I’ve purchased and verify all the purchases. Then I just pay off the credit card in full based on the statement balance. I also don’t ever incur any interest charges or anything by using that method and you take advantage of the one month delay! =)

    Reply
    1. save. spend. splurge.

      Oh yeah! The one month delay for a bit more interest earning. My story on that is that I tried, and then I forgot ONE entry one day and my whole accounting got messed up. Now I just pay it and try to spend less. LOL

      Reply
  3. Jessie's Money

    I have a pretty similar process – I don’t always pay it the next or same day – but within a week I do. I usually wait for the charge to be posted on my credit card so I can verify the charges before paying it.

    Reply
    1. save. spend. splurge.

      I do that too but only out of sheer laziness.

      Reply
  4. Lisa

    I pay my credit card once every weekend, that way, I don’t have to worry about not paying on time. 🙂

    Reply
    1. save. spend. splurge.

      I usually go through all of them when I see my wallet about to burst.. then I mass pay each transaction one by one!

      Reply
  5. Sense

    I don’t do anything very different from you, except I pay my cc bill once a month.

    All my receipts are kept until I enter them into my budgeting Excel spreadsheet, usually every evening. It takes longer for the spreadsheet to open than for me to enter things in usually. Most weekdays I don’t even have expenses, so it’s pretty easy. Plus, my brain auto-records each purchase/place/time automatically now in a sort of snapshot–so even when receipts aren’t available my brain keeps the amount and what I spent it on, safe.

    In the spreadsheet, I record the amounts, the budget category they fall under (“eating out”, “groceries,” etc.), usually a short description (“italian after PhD defense with Tracy July 1”) which also sort of acts like my diary. If need be, I also assign the expense a further category to track, say, my alcohol or transportation spending. At the end of the month, when my cc statements come through, I go through each cc statement and match up the charges. I have my cc’s all set to auto-pay in case I forget one month.

    Neat to get a look into what other people do!!

    Reply
    1. save. spend. splurge.

      Wow. You can remember each amount? Impressive. I just make a note in my AwesomeNotes on my iPod Touch or in Reminders….

      Reply
  6. Ali @ Anything You Want

    Interesting system. I keep track of my spending on Mint and make notes about what expenses are for there. I also keep an eye on my credit cards online, just to make sure nothing fraudulent is happening. Then at the end of the month, I pay the statement balance in full.

    Reply
    1. save. spend. splurge.

      I’m too scared of Mint. I don’t like giving them access to my personal banking information and the government of Canada doesn’t recommend those sites either.. better safe than sorry.

      Reply
  7. raluca

    I normally pay the credit card in full once a month, because I have a 45 days interest free period. I also log everything I’ve been spending every day and at the end of the month check the values with the credit card online statement.
    You seem to be very thorough! 🙂

    Reply
    1. save. spend. splurge.

      I’d like to just pay it in full but what if I get accidentally overcharged?

      I checked my statement today and this exact situation happened. I got charged for 5 diaper covers instead of 4!!!! I had to email them and ask them for the difference.

      If I just cleared it in full and didn’t check each one, line by line, I’d have been out that $$$.

      Reply
  8. SarahN

    SO the cashback thing hasn’t really happened or taken off in Australia, which is why I don’t use a credit card more. I don’t go line item like you do, but pay it off every pay and review what’s on there. There’s only ONE automated deduction (my $30 phone credit), but otherwise, everything is expected.

    Reply
    1. save. spend. splurge.

      Oh boo hiss. If that were the case I’d debit all the time. OR use cash.

      Reply

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