Manufactured Spending

Managing Budgets While Manufacturing Spend

One of the biggest challenges when you’re manufacturing large amounts of spend is trying to keep your personal budget on track. Sure, it’s possible to off-set most manufactured spending fees, but when you’re trying to normalize spending patterns by channeling your personal spending across a dozen credit cards, it’s easy to lose track of your spending. And go way over budget. Even reviewing your spending on can be confusing because how do you differentiate between your actual grocery expenses and gift card purchases?

Purse full of Visa gift cards
My purse during holiday/gift card churning season

There are a few ways to handle this and is really the key. pulls all transactions from your designated accounts and then provides data (i.e. pie charts) about your spending patterns. The good news is you can actually go into your account and change the category on each transaction so that the resulting data isn’t skewed. For example, if you have a bunch of Safeway Visa gift card purchases on your Amex Blue Cash Preferred Card, you can re-categorize them as “Uncategorized” in your account. Or make up your own label. I wouldn’t go so far as to call it “manufactured spending” but “MS” or something similar is fine.

Depending on how much manufactured spending you do, it can get tedious to go in and change the categories on gift card purchases. I think it’s worth it, since it can help you keep your personal spending separate from your manufactured spending. Some of you might find it easier to put all personal spending on a separate credit card. I don’t find it helpful. For starters, I like to spread spending across all of my cards, for variety. The last thing I want is for every transaction posting to my Chase Ink Plus to be a Staples purchase. Or for my SPG Amex card to have nothing but $2500 transactions. That looks fishy and is the easy way to a shutdown. So I mix in everyday spending to keep things looking normal.

Channeling spending towards multiple credit cards also makes it possible for me to take advantage of category bonuses. My personal spending doesn’t add up to anywhere near what my MS does. So it’s not like the category bonus earned from my $15 lunch is going to get me to Fiji. But why leave points on the table by not maximizing every dollar spent? It all adds up and if I can earn more than 1 point per $1, I’m not going to forego these points for the sake of separating my personal spending.

I have to admit, I haven’t always been this organized when it comes to keeping MS and personal spending separate. While I don’t have a specific monthly budget, I’m also not a big spender. I have a pretty good sense for what is and isn’t reasonable. But even I was stumped when I got a notification from a few months back that I’d spent $700+ on dining out. WTH? Where did that money go? It turns out that $15 I spend on lunch, plus my twice-daily coffee habit really adds up. So while it didn’t seem to me like I was spending more than I wanted to, I definitely did. Which is why I appreciate recognize the importance of using to track my personal budget as well as manufactured spending.

What are you doing to separate personal and manufactured spending and stay on budget?

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  1. We use YNAB. Awesome tool.

  2. Ariana, thanks for bringing up this subject. Most bloggers never point out the financial dangers of this hobby. It would be easy for the undisciplined hobbyists to find all this in and out of accounts has left them with $40,000 of unintended debt, they never expected.

  3. Great info…can’t wait to try Mint…
    Quick ? Favorite card to MS on? Any dangers using Chase branded cards? or SPG? I am in need
    of these points but don’t want to get shut down:/

    • Favorite card to MS on was the Arrival card (dead horse, I know!). Right now I’d say probably the Ink Plus for the easy 5x and the Alaska card bc I just love seeing such a valuable currency balance grow. I still use Chase and the SPG card – just don’t overdo it. My rule of thumb is not to spend more than my stated income in a year. Diversify your MS sources and also work in some normal spending on each card.

  4. How do you keep track of cash flow, especially when you need to pay down balances before a statement date?

  5. I use Chase Ink Cash for 5X at supply stores for Visa gift cards which I in turn use for normal spend

  6. YonatanPDX

    Mints great, it saveed me a ton of time with the latest Delta/Sears/Best Buy data breach I was able to simply down load all transactions in a .CSV file an open with Excel/Google docs and scroll down to the dates last fall actually had 4 transactions at Best Buy one was an online order, so I even know which card to watch for suspicious transactions.

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