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I use a credit card for most of my purchases as I get to keep money in my account for a longer duration and that earns me extra interest.

But I have been having a little difficulty to include the expenditure in my monthly budget as the billing cycle is from the 16th to 15th of the next month and my income comes in at the end of the month.

How can I efficiently add the credit card expenditure to my monthly budget?

I'm using excel for my budgeting. I have income at the top, my monthly fixed installments get subtracted from this income. I would also like to add the credit card budget in a similar way.

eg:

income : 100
rent   :  20
car emi:  20
equity :  30
------------
balance:  30
  • 7
    If you're payng off the credit card in full every month, a purchase with the credit card is budgeted just like cash or check, and paying the credit card is just an inter-account transfer. – keshlam Jun 3 '15 at 14:27
  • 2
    Not sure I understand your question. Can't you just add lines to your budget like "groceries: 20", or whatever it is you use your credit card to pay for? – BrenBarn Jun 3 '15 at 15:37
  • See also: How do you verify your household budget? – Ben Miller Jun 3 '15 at 18:05
  • If you feel comfortable doing it, Mint will take care of categorizing your purchases for you. I started using Mint after coming to this site and seeing the recommendations for it and I'll never go back to excel. – MiniRagnarok Jun 3 '15 at 19:43
  • Expenses paid through credit card are to be shown as expenses on the date made as opposed to when the credit card bill becomes due, because from a budgeting perspective, you no longer have that money to spend, regardless of when the actual outflow of that money happens. Not doing this is one of the main reasons for over-spending because you look at your bank account, and think that you still have that money to spend. You don't, you are just the custodian till your credit card bill becomes due. – tchakravarty Jan 13 at 14:41
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Is your credit card spending on things outside the categories listed in your question? I generally don't put credit card expenditures in their own category of spending because I'm buying things like gas and groceries, etc.

I track all spending whether from my checking account (bill autopay) or credit card account as spending in budget categories, and I just transfer money from my checking account to my credit card account to cover anything that was spent there during the previous month.

  • Yes, its for things other than the mentioned categories. Like food, groceries, clothes, etc. – Codename Jun 3 '15 at 14:23
  • 14
    Yeah, this. You should have categories for the things you are spending on. You spent the money when you made the purchase, not when you pay the credit card. The CC is just an account, and your payment is a transfer from one account (your bank account) to another (the CC account). – briantist Jun 3 '15 at 16:22
  • 14
    +1 for "You spent the money when you made the purchase, not when you pay the credit card" – Codename Jun 3 '15 at 16:53
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But I have been having a little difficulty to include the expenditure in my monthly budget as the billing cycle is from the 16th to 15th of the next month and my income comes in at the end of the month.

Many companies will let you change the statement date if you want, so one way to do this would be to request your bank to have statements due at the end of the month or first of month.

You can call and ask, this might resolve your problem entirely.

How can I efficiently add the credit card expenditure to my monthly budget?

We do this using YNAB, which then means our monthly budget is separate from our actual bank accounts. When we spend, we enter the transaction into YNAB and it's "spent."

Additionally, we just pay whatever our credit card balance is a day before the end of the month so it is at $0 when we do our budget discussion at the end of each month.

0

So hopefully you are not spending the money before you make it. If you are, you are asking for trouble. If not the solution is easy.

If you use a spreadsheet for tracking have a item in your checking account running total that is simply CC to pay.

Lets say you just got paid, and your balance is like this:

Checking 100  100

You can then do virtual withdrawals for each category

Checking 100  100
Rent     10   90
car emi  20   70

In this case you have 70 left to spend. Whoops the car gets a flat which costs you 5 that you put on the card and you also pay your rent by CC. Then your spreadsheet should look like this:

Checking  100  100
Rent      0    100
car emi   15   85
CC to pay 15   70

You still have the 70 left to spend, and when the CC bill comes due you are free to write the check.

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