Reader’s question – Credit cards, and my personal monthly budget tricks!

I posted THIS post about my amazing savings trip to Costco. A reader left this comment that I wanted to address:

*Note: Click HERE to see this summarized in a video.

perilsea said…

That is a pretty amazing day, for sure! Do you just use your Amex at Costco, or do you buy other things with it as well? Do you spend quite a bit per year at Costco? I'm just curious to know if it's really worth signing up for another card, just for Costco.. and if we would make enough in rewards to make it worthwhile. We use our Visa for everything so we get the 1 point per $1 rewards, but obviously Costco only takes AmEx or debit.


Hello Perilsea,
Thanks for your comment and questions! Here is my opinion on it (and please remember this is only my opinion – everyone is entitled to their own!): Yes, it's worth it. This is the one and only credit card I use, so the perks are great. As for getting another one just for Costco, it depends on how much you shop there.
Here's why it works for me:

I basically shop at two stores, Wal Mart and Costco. Before recently I would only go to each store about 1x per month, maybe 2x if I ran out of something that I ended up needing. I'm also a fan of going for convenience and running to the nearest store when I need something quick. But my major shopping I only do at those two stores.
I split a produce basket with my friend every two weeks, so that covers my produce and I only pay $15/mo for produce.  Now I go to Costco more frequently for milk, so I tend to take more trips, and spend a little less each time rather than doing one big shopping trip each month. My Costco card perks are really helpful to my family, but if you already have a card with perks then that will have to be your personal call!
In terms of using a credit card in general and sticking with a family budget…
I have one lump monthly budget. This is to cover everything: groceries, home goods, personal products, clothes, dog food, diapers, recreation, eating out, milk/formula, trinkets & splurge buys, everything. The only thing it doesn't really cover is car needs and medical expenses. I'm not perfect but for the most part I really try to stick with this.
I don't cook every night because my family is so small, we're big into leftovers. I would say on average I spend maybe $200-$250/month at Costco (give or take) and $100-$150 at other stores (give or take). This is a very rough average. Last month I had my son's birthday so I spent more at Costco, the month before I didn't really need much from Costco so I spent more at Wal Mart.
I use my credit card for every purchase I make. This takes a lot of self-control, but the perks are really worth it in my book. We tried using cash for a few months but I found that I actually blew threw my cash faster, and we didn't get any perks for it…so now I back to my good ol' Amex.

Here's how I do it:

  • Each month I get a sturdy envelope, write the month across the top, and write my starting budget under that.
  • Throughout the month I keep a running tally of everything I spend, written on the envelope, so I can keep track (like balancing a checkbook). I am sure to add money when I return something, and I always write the store name next to the amount so I can remember if I've already logged something or not.
  • I keep all of my receipts (even seemingly insignificant ones!) in the envelope. I believe in returning things you don't need, so never throw away a receipt! Plus this holds you accountable for what you spend, and you have reference if you lose track of your spending.
  • I also keep any extra cash I have (like the $86 I got from Costco – see THIS post) in the envelope. That $86 I'm holding onto in case I need extra money this month. If I don't end up needing it, I'll use it to put into savings or pay down debt.
  • If my balance is low and I need more money I find things to return, or I simply go without.
Here is why a credit card is worth is for my family:
  1. It keeps digital track of everything I spend.
  2. If you lose cash or if it gets stolen, it's gone forever. If you lose your credit card, you can get a new one. If it gets stolen, that money gets returned to you.
  3. It builds credit. As long as you pay it off each month it helps build your credit score and builds credit which is IMPERATIVE for big purchases like cars, houses, and loans. But it WILL hurt your credit if you leave a running balance!
  4. The perks. I get cash back for money I'm spending anyway. My husband really wants to get a Southwest card someday so we can get flight miles for the money he spends.
  5. In terms of having a Costco card, it's the store I frequent the most so it's worth the double perks.
  6. It's good in case of emergencies. If you have a medical emergency, family emergency, or otherwise, its nice to have a credit card just in case you don't have enough cash to cover something. You just never know. For my family my husband is self-employed. He could go a month or two without a full paycheck, so sometimes we have to leave a balance that we try to pay off asap. We really try not to do this, but we wouldn't be able to pay some bills without it!
To answer your question Perilsea, I love using a credit card. It works well for my family. Everyone is different though!
Here are some questions for other readers:
  • Do you agree?
  • Do you like using credit cards?
  • What are things you do to keep a good budget?
Please comment, we can all teach each other here!
Thanks for commenting Perilsea, I hope this helps!


  1. Thanks for your response, it’s always helpful to see how others manage their household budgets. When we first got married, we had a strict budget and stuck to it, but our situation right now doesn’t really require us to follow a strict budget, so now we just try to be moderate in our spending and that seems to work for us.

    We also use a credit card (our Visa) for all purchases that allow credit (we wish we could put our mortgage on there, that would be BIG points!) and then we pay off the balance each month. The rewards we get are used to pay down our bill as well, we just cycle them back in. My philosophy is, why wouldn’t you use a credit card if they’re going to give you money back just for using it? So long as you have the self-control to not spend more than you have…

    My curiosity was mostly just about whether it was worth it to have the separate AmEx card to cover Costco expenses, since they don’t accept our Visa. Hubs and I are discussing that, we’ll see! Anyway, thank you for the helpful tips, I always love finding new ways to save money.

  2. I LOVE the idea of using an envelope. I’m a terrible budgeter and I always lose my receipts. Your idea totally fixes my problem…thanks!

  3. I see that this is an older post, but I just absolutely had to put my hippie housewife two cents in. I absolutely do not agree with using a credit card ever! Credit was something that was invented specifically to pray on consumers want vs need skills. It gives us a false sense of security!

    With that being said…. I think you’ve found a way to sort of beat the system and thats great! You seem smart with your money and I absolutely love this post.

    Also, your writing is amazingly easy to read compared to the muddled thoughts of most blog posts.

    • I love this comment and feedback SO SO SO MUCH! And haha for the hippie housewife part of it, you are hilarious 🙂 Major high five 🙂 Yes, for the most part credit has bad connotations and horrible consequences. However, the goal is to get to the point where you can use them responsibly to HELP your family. It took us a while but we are finally there. And thank goodness for credit cards or else we literally wouldn’t have been able to buy groceries for about 3 months during tough financial times. Not that it should give anyone a false sense of security like you said, but it was either that or run to a title loan place that is even worse. But yes, thank you for your comment, I loved every word of it – and thanks for your sweet feedback! XOXO

  4. Hi,
    I’m really intrigued by your system. I took over paying bills a few years ago b/c I was always complaining about the way my husband did it, and he said, “fine, you do it.” I’m glad I did b/c I understand so much more. We have plenty of money, and we shouldn’t go to zero on in the whole every month, but we do b/c of me. I’m just terrible of keeping track. Part of it is I love to shop, and part of it is I can’t keep track of auto debits and most budgeting systems take you down to zero, so there’s no room for margin and I always make mistakes and need margins. Its so frustrating for me. When I was single and broke it was so much easier b/c now there’s so much more to keep track of. Anyway, I’m interested in your credit card system but I’ve never been able to use a credit card without going over what I need to spend. I just justify things to myself too easily. Anyway, any thoughts you could give on that. Also, you said you only had two other categories: car and medical. What about your mortgage, electricity, gas, water, cable etc….. Where do those fit? I don’t know how you do 600 a month total. I’m amazed. Thanks for your input. Always trying to grow in this area.

    • Hi, just wanted to give you an idea. I record my auto debits and saving transfers as soon as I record my income deposit. You see that way the money is already spent, which it actually is if it’s auto debit, and I always know what is left. It’s pretty easy to work from there. I know I have x amount of dollars set aside and I never get and overdraft! All of my auto debits are in my “Family” budget just like “Fun Cheap OR Free.

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