|My most frivolous purchase, as I found it.|
My dad was an early adopter of credit card rewards. He taught me credit cards are a convenient way to pay for things while getting some nice perks. You just have to make sure you pay your bill in full every month. The first rewards credit card my dad used gave cash back in the form of “True Value Bonus Bucks.” These were essentially gift cards for the True Value chain of hardware stores, which he frequently shopped at, so he was essentially getting cash back. That credit card has gone away, but the concept it spawned lives on.
Cash is King
Let me take a moment to point out I strongly prefer cash-back credit card reward programs. I know a lot of people swear by the air mile cards, but I can’t get into them. Keeping track of various arbitrary points and figuring out how to most effectively utilize them isn’t something I want to deal with at this point in my life. Maybe after I retire and can devote more time to it, I will explore travel points. For now, I will take cash over points every day of the week.
My strategy for controlling frivolous spending is actually quite simple. I keep track of how much I earn in credit card rewards and I only use that for my more discretionary spending. On top of my credit card cash-back, I also include any “found money,” which includes, yes, money found on the street, but also things like the contents of my change jar, credit card referral payments, and money made from collecting recyclables in my college dorm.
This system of using credit card rewards, which my family still refers to as “Bonus Bucks,” has several benefits:
- It allows guilt free purchases of frivolous items, which we all want to make sometimes. Totally depriving yourself of all non-essential items is a good way to be miserable and burn yourself out on frugality.
- It sets a hard limit on how much you can spend on unnecessary stuff.
- It is money you wouldn’t normally have, so you don’t even notice the spending.
Here’s what my "Bonus Buck" tracking spreadsheet looks like. You may notice most of the money goes toward my motorcycle and Miata.
|6/1/2006||97||Change Jar||12/29/2006||235.94||Cycling Shoes|
|5/22/2007||50||Referral Bonus||8/5/2012||1.52||Penetrating Oil, Engine Cleaner|
|8/25/2007||50||Extra Referral Bonus?||8/7/2012||37||DMV Fees|
|8/27/2007||73.36||Dividend Dollars||8/11/2012||28.41||Haynes Manual|
|12/11/2007||55.04||Dividend Dollars||8/14/2012||36.54||Clymer Manual|
|5/1/2008||51.59||Dividend Dollars||11/3/2012||146.2||Motorcycle Lift, Misc. Tools|
|10/7/2008||74.28||Dividend Dollars||11/13/2012||47||BMW Airbox|
|5/9/2009||60.9||Dividend Dollars||11/10/2012||14.66||27mm Socket, etc.|
|11/12/2009||62.7||Dividend Dollars||11/16/2012||171.31||Exhaust, Rear Subframe, etc.|
|4/7/2010||86.45||Dividend Dollars||11/16/2012||169.25||Exhaust Wrench, Gaskets, etc.|
|9/25/2010||50||Dividend Dollars||11/18/2012||29.48||Front Fender|
|11/4/2010||50||Dividend Dollars||12/8/2012||17.91||Engine Cleaner, Penetrating Oil|
|11/20/2010||50||Dividend Dollars||12/14/2012||11||36mm Socket|
|1/22/2011||50||Dividend Dollars||12/16/2012||129.3||Rear Wheel/Tire/Axle|
|3/22/2011||150||Dividend Dollars||12/29/2012||143||Front Wheel|
|4/22/2011||50||Dividend Dollars||9/30/2013||184.82||Brake Line, Fuel Fitting, etc|
|6/27/2011||50||Dividend Dollars||4/23/2014||23.94||Spring Compressor, Wire Brush|
|7/26/2011||120||Dividend Dollars||5/7/2014||126.34||Piston Rings, Cam Seal|
|8/9/2011||-75||AmEx Annual Fee||7/7/2014||189.09||Helmet|
|9/8/2011||125||Blue Cash||8/2/2014||58.63||Miata Car Cover|
|7/1/2011||80||Honeymoon Cash Back||8/8/2014||57.77||Miata Shift Boot, Antenna Plug|
|10/11/2011||75||AmEx Referral||8/9/2014||15.25||Miata Gear Oil|
|10/11/2011||50||Blue Cash||8/30/2014||19.35||Miata Delrin Shifter Tip Bushing|
|11/9/2011||75||Blue Cash||9/16/2014||19.06||Brake Fluid|
|12/20/2011||85||Wells Fargo Cash Back||10/4/2014||33.09||Miata HVAC Duct|
|1/9/2012||75||Blue Cash||11/15/2014||38.83||Miata Clear Turn Signals|
|3/31/2012||75||Blue Cash||11/15/2014||95.4||Miata Headlights|
|5/10/2012||100||Blue Cash||11/20/2014||10.88||Miata Headlight Cover Metal|
|7/27/2012||100||Blue Cash||11/22/2014||11.94||Miata Blinker LEDs|
|8/7/2012||-75||AmEx Annual Fee||11/22/2014||13.07||Miata Headlight Connectors|
|10/10/2012||100||Blue Cash||1/27/2015||79.41||Miata Undertray Aluminum|
|11/26/2012||50||Dividend Dollars||2/5/2015||52.28||Miata Undertray Hardware|
|12/15/2012||125||Blue Cash||2/5/2015||9.80||Tin Snips|
|3/10/2013||125||Blue Cash||2/9/2015||10.39||Miata Hood Vents|
|4/7/2013||100||Blue Cash||2/23/2015||70.38||Miata Brake Parts|
|6/9/2013||100||Blue Cash||2/23/2015||18.51||Miata Brake Parts|
|8/7/2013||-75||AmEx Annual Fee||3/13/2015||41.15||Junkyard Miata Parts|
|8/12/2013||150||Blue Cash||8/1/2015||25.56||Mechanical Pencil|
|10/10/2013||100||Blue Cash||8/1/2015||70||Miata Soft Top|
|12/9/2013||125||Blue Cash||8/2/2015||20||Miata Top Striker Plates|
|1/24/2014||50||Dividend Dollars||7/1/2015||100||Miata Wheels/Tires|
|2/5/2014||100||Blue Cash||8/30/2015||200||Miata 6UL Wheels (2x)|
|3/10/2014||100||Blue Cash||10/19/2015||40||Sheet Metal Shears|
|5/13/2014||150||Blue Cash||1/3/3016||45||Triumph Exhaust|
|8/7/2014||-75||AmEx Annual Fee||2/6/2016||120||Ducati GT1000 Rear Shocks|
|11/2/2014||150||Humana Vitality - Amazon Credit|
|2/16/2015||125||Humana Vitality - Amazon Credit|
|4/3/2015||25||Humana Vitality - Amazon Credit|
|8/7/2015||-75||AmEx Annual Fee|
|11/24/2015||15||AmEx Offer (Amazon)|
Track your Finances
One of the most important steps to becoming Fiscally Free is to track your expenses. Personal Capital makes that super easy, and best of all, it's FREE. It automatically pulls transactions from your financial institutions and analyzes them for you. There's also top-notch security, so your information is safe.
Personal Capital is much more than an expense tracker. It has a number of advanced tools to track and analyze your investments as well as your net worth. It is a great resource, and the price is right.
I highly recommend you try Personal Capital today. You'll be glad you did.