When to record Credit Card charges on Expense spreadsheet

[Amethyst]

I'll bet this has been discussed before, but darned if I could find a thread. Then again, I'm too lazy to spend more than 10 minutes searching

My new year's resolution is to be more OCD about our finances. To that end, I'm setting up spreadsheets for monthly expenses and investments.

We use a credit card for all discretionary expenses--everything, that is, except taxes and payroll deductions. What would make more sense--record items actually purchased in December, under December on the spreadsheet, or record them under January, since that's when I pay the CC bill? Or is it a wash?

Thanks,

Amethyst

 

[ziggy29]

For my budgeting, the money is gone the moment I whip out the plastic, so if I buy something on December 21 which is paid off on January 16, the expense is recorded for December 21.

You can do it any way you want, but I prefer this method because it forces me to treat the money as spent as soon as I make the charge.

 

[REWahoo]

I'm with Ziggy on this one. All charges are recorded in the month they are incurred, not when I pay off the monthly CC balance.

 

[Notmuchlonger]

Yeah if its charged in Dec. I put it in Dec.

 

[bbbamI]

Ditto..charge in Dec, post in Dec...

 

[Amethyst]

OK...it's unanimous! Record the expense at the time of purchase. Thanks, folks. A.

 

[TromboneAl]

Here's another reason to post them when the charges are made: If you use Quicken or another app to track your expenses, that's the way the program will do it.

 

[OAG]

It is also the way the IRS figures it too. Which makes it a good idea (if it helps you with taxes) to prepay medical/dental expenses (or others) - like a kids braces - puts the expense into the year you charge it.

 

[retire@40]

It is also the way the IRS figures it too. Which makes it a good idea (if it helps you with taxes) to prepay medical/dental expenses (or others) - like a kids braces - puts the expense into the year you charge it.

With a couple of exceptions, prepaid medical expenses are not deductible.

The expense has to be incurred in the same year for the payment to be deductible that year.

 

[Alan]

OK...it's unanimous! Record the expense at the time of purchase. Thanks, folks. A.

To be OCD you need to do it this way.

I'm lazy these days - I record the whole of the cc monthly statement for the approx. month it applies to. I just got my Jan statement but I record against Dec since all but 4 of the charges happened in dec.

 

[OAG]

With a couple of exceptions, prepaid medical expenses are not deductible.

The expense has to be incurred in the same year for the payment to be deductible that year.

Sorry I was not clear enough. Example (I was alluding to) is a dental bill for $XX,XXX to get the braces etc, in for a child set up on an installment plan where you pay the dentist by the month - the total cost is what it is and you decide to pay it off (early) in December via a CC.

 

[JOHNNIE36]

You guys slay me. What's with all the spread sheets and Quicken and when do you record something? What's the difference if you purchase it in December and record it in January or vice-versa. I don't get what all the fuss is over. It tells me you don't have anything better to do than make out spreadsheets. I like to operate on the principal of "decide on purchase-pay by plastic-receive bill-pay bill". You remind me of a golf buddy that records every shot, what club he used, how many putts, how many chips, up and downs and greens in regulation. He records all that info in his computer. My question to him is "now what are you going to do about it?"
Not much!!

 

[OAG]

You guys slay me. What's with all the spread sheets and Quicken and when do you record something? What's the difference if you purchase it in December and record it in January or vice-versa. I don't get what all the fuss is over. It tells me you don't have anything better to do than make out spreadsheets. I like to operate on the principal of "decide on purchase-pay by plastic-receive bill-pay bill". You remind me of a golf buddy that records every shot, what club he used, how many putts, how many chips, up and downs and greens in regulation. He records all that info in his computer. My question to him is "now what are you going to do about it?"
Not much!!

Tax implications? We RE that is why we have to do this sort of stuff - lots of time on our hands.

 

[SecondCor521]

You guys slay me. What's with all the spread sheets and Quicken and when do you record something? What's the difference if you purchase it in December and record it in January or vice-versa. I don't get what all the fuss is over. It tells me you don't have anything better to do than make out spreadsheets. I like to operate on the principal of "decide on purchase-pay by plastic-receive bill-pay bill". You remind me of a golf buddy that records every shot, what club he used, how many putts, how many chips, up and downs and greens in regulation. He records all that info in his computer. My question to him is "now what are you going to do about it?"
Not much!!

I agree with you -- if you're not going to perform any analysis on the data, then it's a waste of time, whether it's finances or golf.

Personally, I do record all my transactions in Quicken and Excel. For one thing, it helps me keep track of 43 accounts. About half of those accounts are directly or indirectly involved in my AOR, which earned me $11,281.06 in the last nine months of 2008. Examining my expenditure records has also helped lead to a YOY reduction in my expenditures of $5,892.96.

Perhaps those sums are not much to you. To me they matter a great deal. To each his own.

2Cor521

P.S. -- I also play golf, but I don't keep track of all the stats your friend does -- usually just the standard strokes per hole and strokes per round, and often the number of putts and number of penalty strokes.

E.T.A. -- To OAG's point above, I firmly believe that tracking finances in an OCD way can also lead to FIRE far earlier than otherwise possible. I'm on track to retire by age 47. (46.96 actually.)

 

[Notmuchlonger]

I track spending. It takes me about 5 hrs a year. 1 hr per quarter plus a little extra. I know where every dollar went. So yes, I wasted 5 hrs per year. Those who don't waste 5hrs per year tracking expenses are so so so much further ahead in life


You see where this leads don't you.... yeah I know you do

 

[Khan]

I track spending. It takes me about 5 hrs a year. 1 hr per quarter plus a little extra. I know where every dollar went. So yes, I wasted 5 hrs per year. Those who don't waste 5hrs per year tracking expenses are so so so much further ahead in life


You see where this leads don't you.... yeah I know you do

OCD on expenses leads to FIRE.

 

[Alan]

OCD on expenses leads to FIRE.

Although I no longer itemize like I used to I do believe this to be true and tracked everything. When you put things into categories you can really see where your money goes and zero in onto places to save.

DW and I were just discussing this an hour ago, sitting in a coffee shop having a drink after shopping. We know how much we spend each year and should be just fine in ER but if things went t*ts up such as happened to lots of folks recently, then we are very comfortable that we can cut back a lot and still be very comfortable because we know exactly where the money is going plus we've been there before - not like some folks who have only known wealth and suddenly have to make huge cuts in their living expenses. (e.g. how do we tell the maid that we can't keep her on)

 

[mews]

OCD on expenses leads to FIRE.

Or, perhaps to staying FIREd, if the trigger was already pulled.

I found that being OCD last year a) really slowed my spending (Do I really want to record 21.92 spent on a weird purple whatsit? Maybe not! ) and let me do some mid-year and year-end analysis, to reroute money from low-priority 'wants' to a better class of frivolity.

The sushi is not negotiable.

ta,
mews

 

[REWahoo]

You guys slay me. What's with all the spread sheets and Quicken and when do you record something? What's the difference if you purchase it in December and record it in January or vice-versa. I don't get what all the fuss is over. It tells me you don't have anything better to do than make out spreadsheets. I like to operate on the principal of "decide on purchase-pay by plastic-receive bill-pay bill". You remind me of a golf buddy that records every shot, what club he used, how many putts, how many chips, up and downs and greens in regulation. He records all that info in his computer. My question to him is "now what are you going to do about it?"
Not much!!

Johnnie, one of the things you'll discover if you hang around this forum for a while is none of us are exactly alike (thank goodness) and "different strokes for different folks" seems to make the world go round. You may also discover that replying to a straightforward question with a response that may be interpreted by some as insulting could earn you a similar response to one of your future posts. That's something we don't want to encourage since it leads to nasty little spats and too much work for the mods.

 

[dex]

I record it when paid - taken out of my checking account.
This allows me to figure out my cash needs for the month and transfer it from savings to checking.

 

[Amethyst]

It tells me you don't have anything better to do than make out spreadsheets.

I got a chuckle out of Johnnie's post, 'cause I can sorta see his point. The last thing I want to be is someone who tracks everything because they have nothing better to do. However, I'm not like that and I don't get the impression others on the forum are like that either. I simply can't think of a simpler tool than a spreadsheet to help me see patterns and trends in spending, plan for the future, and stay out of financial holes.

It took me about 2.5 hours today to set up my few spreadsheets, and probably will take an hour a month to keep them up. With my full-time job, grad school, workouts, housework and numerous hobbies, I still can afford one hour per month to help put me on track for retirement.

Two other places where we are also applying a little strategic OCD are a) I'm tracking my food intake [mega-boring...] until I have lost the weight I want to lose and b) husband routinely inventories the contents of our 2 freezers, which has helped us cut down on wasted food.

 

[FurBall]

...b) husband routinely inventories the contents of our 2 freezers, which has helped us cut down on wasted food.

DH also routinely inventories the important stuff in our house -- wine.

 

[ERD50]

You guys slay me.....

Johnnie, one of the things you'll discover if you hang around this forum for a while is none of us are exactly alike (thank goodness) and "different strokes for different folks" seems to make the world go round. You may also discover that replying to a straightforward question with a response that may be interpreted by some as insulting could earn you a similar response to one of your future posts. That's something we don't want to encourage since it leads to nasty little spats and too much work for the mods.

JMO, but I think if anyone who found JOHNNIE36's post "insulting" needs to grow a little thicker skin. I got a little laugh out of it myself, 'cause it holds a mirror up to my own tendency to over-analyze things (though that is often just a mental exercise rather than really being OCD about the subject - some people do crosswords, I over-analyze stuff).

I agree with you -- if you're not going to perform any analysis on the data, then it's a waste of time, whether it's finances or golf.

It tells me you don't have anything better to do than make out spreadsheets.

I got a chuckle out of Johnnie's post,

I see I'm not alone.

-ERD50

 

[ERD50]

... other places where we are also applying a little strategic OCD are

b) husband routinely inventories the contents of our 2 freezers, which has helped us cut down on wasted food.

Ahhh! A subject near and dear to my heart!

First, I absolutely have to give DW tons and tons of credit for cooking delicious and nutritious meals for our family. But...

Her total lack of any "inventory control" drives me bonkers. We waste far too much food, and some of it gets eaten a bit after it's prime (while meat may be OK for 6 months to a year in the deep-freeze, I think it is best to eat it with just a couple months max). She brings home groceries and just stacks the new on top of or in front of the old ( doesn't rotate the stock). She buys a new box of something we use rarely when we have 4 already because she didn't know if she had any or not. Then that box gets stored in a different cabinet than the others so you never know what you have....

I finally inventoried the spices in the freezer (just a list on an index card, stuck in the cabinet where we keep the spices), after finding about 8 separate quart bags of parsley, some in the inside fridge/freezer, some in various shelves of the garage freezer, one in the cabinet... after she came home with more dried parsley! And about 4 half-full boxes of alphabet-pasta (I can't remember the last time we had alphabet-pasta in anything). And of course, all this excess stuff gets in the way of the other stuff, so you can't find that either - it's a snowball effect.


oooops, I guess this is thread-jack, but too late to stop now!

Anyway, the inventory really helped. When we ran out of cinnamon in the spice rack, I could say - "we have more in the freezer!". Six months later, my index card inventory vanished under mysterious circumstances

Oh well, it is her domain. I would not want her re-arranging the tools in my workbench. But OTOH, I don't buy 6 of the exact same tool and just stack 'em up.

So maybe I should ask Amethyst, How did your husband go about setting up a freezer inventory w.o getting you POd?

TIA - ERD50

 

[SteveL]

If you let quicken do the work, and download the transactions, they get recorded into Quicken on the date the the credit card company has the transaction on their books.
When you buy Quicken Deluxe, the version I use, you pay 40$ about and get the ability to download for three years. (Quicken has to pay to keep up the servers they use to move data to and from the banks etc.)

Then, for the truly AR folks, Quicken will export the data to Excel, so that you can slice and dice to your heart's content. MS Money may have the same abilities.....I'm not familiar with it.

I have more than 15 years of transactions in Quicken. For those who have the occasional "discussion" with the DW/DH about when something was bought, a long record in Quicken provides the ability to settle things.