Frugal Friday

Hurrah - we're just back from a cheery weekend away visiting a lovely chum waaaay up north. A fabby time was had, spending money was taken from a special fund which is lurking for just such adventures, and some photos from the trip will be making their way onto here before too long. On arrival back, we were greeted by the credit card bill sitting on the doormat - not quite so cheery, that!

Terns - Farne Islands 2013

So, we're all familiar with the next bit aren't we - rip open the envelope, glance across at the "total due" figure and Whooomph! Your heart sinks into your boots with the shock of it. Even on a month when we know we've had some spendiness, the shock of the amount seen in one lump like that still has the power to make us think "aargh" - but whether that sinking feeling lasts or not depends entirely on how you deal with it from there. In years gone by we would have consoled ourselves that the Direct debit was set to take the minimum repayment in any case, and we could worry about the remainder of the bill over a few months. It would have been "out of sight, out of mind" for a while, at least. Thankfully, we've seen the light, and a more proactive approach gets taken these days.

When the bill arrives (and we always know to within a few days when that will be - step one is to learn your card's relevant dates - both billing and payment!) the first thing we do is sit down and check through everything. Because we have two cards on the same account, and the card pays cashback on spending, we both put all spending - joint and personal - on the cards where we can, so we check through and make sure that one or the other of us recognises all the transactions listed. Step two: Are you 100% sure only those people authorised are using the card? Once we're happy that there's nothing unusual on there, we start to break things down. Some spending comes under the habit of "general" and this is accounted for by the money we each automatically transfer over to the joint account each month. So diesel for the cars, Mr EH's train ticket, odds and ends of food shopping etc. Some joint travel also gets accounted for in that way - we each add £10 or £20 to our Oyster cards most months for example. Periodically we add up things like diesel costs for example, so we can keep track of what we spend in those areas on a monthly basis. Step three: Learn what your basic expenditures in an average month will be - that way you come to expect them. 

Sunset at Loch Bee, South Uist, 2013

The next stage is to go through the bill line by line "claiming" spends - this month MrEH had some dental work done, for example, and bought a new waterproof coat ready for our trips to Orkney and the Hebrides. I'd taken the plunge and bought the new camera I've been looking at - slightly sooner than planned but I came across precisely the one I wanted at a hard-to-beat price and so grabbed it quick! We also had odds and ends of car related expenditure, a couple of small spends relating to the holiday, and some train tickets bought which weren't quite "general expenditure" but were for both of us. We mark off the bill - our initials against personal items, or "C", "H", "Jt" etc for the other areas. Once every line is "claimed" we add everything up and make sure it equals the amount we need - simple eh?

Thanks to that thing back in step one, we know when we need to start thinking about moving money across into the joint account where the Direct debit will be taken from. Remember also that knowing the DD date is only half of the answer here as usually DD's can come out within a few days of the "actual" date. In our case the DD date is the 26th - but we know it can actually get taken from the account anywhere between the 22nd and the 29th, so the money needs to be sitting waiting "just in case". Step 4 - Get Organised! So, the actual money shuffling itself then - Car costs and holiday spending are budgeted for monthly of course, so that's just a simple matter of shifting the money across from those accounts. Our own personal stuff too, we move from our own current accounts or savings accounts. Some big annual spends go on the card too - insurances for example, and those are budgeted from either the car account or our "Household" account which is fed with a sum monthly to account for such things. Things like train travel for joint adventures, or tickets to events we're both attending get taken from our "joint fun" account - again this gets "fed" a regular monthly amount. We've also got accounts for things like Christmas present expenditure, making it less likely that things like that will come as a nasty shock, too. (And let's face it, it shouldn't, should it!). Once everything is shifted across, one final check both that there is enough money in the account, AND that there are no other DD's to come out which might leave us with a shortfall, and we're done!  Our joint current account is not interest-paying, so we try not to leave extra money kicking around in there for longer than we have to, so often once the card DD has come out and before MrEH's pay goes in, we can be done to mere pennies in there....you know though, so long as those pennies aren't preceded by the "minus" symbol, that's just fine!

Grenitote Beach, North Uist, 2012

If you spend on a credit card how do you manage it? Pay off in full every month or put big purchases on and pay off over time? If you're a "pay off in full" person, have you got a cashback or points-earning card to maximise the advantage of this?

Robyn