How I Limit (but Don't Eliminate) My Frivolous Spending

My most frivolous purchase, as I found it.

We all want things we don’t need. Frugal people like me are better than most at resisting the urge to purchase those things, but every so often there’s something I just have to have. Fortunately, I have a system for regulating my frivolous spending, and I learned it from my dad—only use credit card cash-back rewards for frivolous purchases.

Family History

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.

The System

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.

Total Earned:	5019.52
Total Spent:	3833.45
Total Available:	1186.07

Earned				Spent
Date	$	Source		Date	$	Purchase
6/1/2006	97	Change Jar		12/29/2006	235.94	Cycling Shoes
9/21/2006	64.31	Dividend Dollars		9/16/2007	215	Ulto-Razor
3/27/2007	53.89	Dividend Dollars		8/4/2012	600	Motorcycle
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
8/11/2014	125	Blue Cash
11/2/2014	150	Humana Vitality - Amazon Credit
11/8/2014	125	Blue Cash
1/21/2015	50	Dividend Dollars
2/8/2015	125	Blue Cash
2/10/2015	140	Fitbit Recall
2/16/2015	125	Humana Vitality - Amazon Credit
4/3/2015	25	Humana Vitality - Amazon Credit
5/9/2015	125	Blue Cash
8/7/2015	-75	AmEx Annual Fee
10/11/2015	250	Blue Cash
11/24/2015	15	AmEx Offer (Amazon)
1/9/2016	125	Blue Cash
3/11/2016	150	Blue Cash
6/9/2016	100	Blue Cash
8/8/2016	100	Blue Cash
9/27/2016	100	Double Cash

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