I’ve read a lot of posts about family budgeting, couple finances, financial infidelity, etc. A simple, but controversial solution, is to put everything that everyone spends on one single credit card – preferably a rewards card.
How Using a Credit Card Helps
Why do this? First, it puts every single charge in one place. Both parties can then easily see what each has been charging. No more financial infidelity. No more hiding charges. No taking out cash at the ATM to get around the card. Just charge it. If a spouse doesn’t want to do this, there is usually a problem bigger than spending. It is also essential that you are both on the same card – not each using your own card. That way it is all shared.
Second, it makes budgeting a lot easier. You can easily see what was spend, and many banks and credit unions now offer services similar to Mint.com, where you can view the categories of your spending and budget accordingly.
Finally, get paid for spending. If you charge everything on the top rewards card you can find, you can really get a nice rebate each month. Coordinate your spending efforts instead of spreading them around and not getting everything you deserve.
When It May Not Work
You may be concerned that this isn’t an option if:
- You don’t have a high line of credit
- You currently don’t have a credit card and don’t have a good enough credit history to get one
You can do the same thing with a debit card, and there are many banks out there that now offer debit card rewards as well. Just make sure that you keep enough in your checking account to support your spending.
What are your thoughts? Do you budget using one credit card? Do you use Quicken or Mint? Do you have any other budgeting tips?
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 6 comments… read them below or add one }
As long as you pay off in full each month and are not looking for a loan on a home or auto, this is a fine strategy.
Mint certainly makes budgeting a lot easier. Some cards provide a break of up your expenditure, that’s pretty handy as well.
Seems like a good idea, and I advocate keeping finances seperate. I think couples should be honest with each other money wise. Spending everything on a credit card I think is a great way of budgeting, especially considering the grace period.
-Ravi Gupta
We used to do that and it doesn’t work for us. Sure we see what we spend money on, but we keep spending money. It’s been proven many time that if you spend cash, you tend to spend less. So now we only charge minimally and go with a cash allowance system. We each get $100/week to spend anyway we want and it works pretty well. We spend less money overall now than when we charge everything. It is too easy to swipe the credit card!
I use a credit card for convenience and frequent flier miles. I would never use it to budget, but it is easier to budget because it is one or two cards.
Great theory for those who are striving for financial fidelity… thought I dont know as a budgeting tool. If you stick to cash only, you will never go into debt, regardless of what one buys.
Very true Justin, but you can miss the rewards that using a card and paying it off each month offers!