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 Mint.com can be confusing because how do you differentiate between your actual grocery expenses and gift card purchases?
There are a few ways to handle this and Mint.com is really the key. Mint.com 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 Mint.com 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 Mint.com 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 giftcards.com 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 Mint.com 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 Mint.com to track my personal budget as well as manufactured spending.
What are you doing to separate personal and manufactured spending and stay on budget?