Home accounting question?
Home accounting question?
Hi all, I have a home accounting question. I keep accounts of on a daily basis. I have a spread sheet which has columns for Income and Spending. I am confused about Credit Card purchases. Here is the scenario:
1. I am making minimum payments on my credit card. For example: $50
2. I make some purchases on my credit card. For example: $30 on a shirt.
How do I account for this? Here are the few options I have:
Income:
Loan: 30
Spending:
Shirt = 30
Credit Card Payment: 50
or
Loan: 30
Spending:
Shirt = 30
or
Spending:
Shirt = 30
Credit Card Payment: 50
or
Spending:
Shirt = 30
Answers:
Elegant: Loan (shirt) 30
Previous Loan to be paid 20
Credit card payment( Loan Paid) 50
2006-11-27 11:30:45
2006-11-27 11:30:45
dougzinboston: You could include the shirt as a "loan", but if you set up the shirt & payment under spending, you're setting yourself up for a double entry that could be confusing. You could set up a third column as "Loan" or "Credit Purchases" and still do your Spending: Credit card payment. This way you don't mix up income with purchases.
2006-11-27 13:36:12
2006-11-27 13:36:12
Chosen Answer
fosterlypuff22: First, I think your credit card purchases should be tracked in a separate column or sheet to give more visibility into what purchases you are putting on credit and you'll be able to track your spending better. Second, you shouldn't be tracking credit card money as income because that is not your money and you have to pay it back. Third, Your credit card payment should be tracked like a bill since its a fixed amount every month. However, You should just be careful about how many purchases you are putting on a card that you are only making minimum payments because most minimum payments are set up so that you are paying mostly interest instead of principle. In conclusion I would advise the following: Income: (should only include salary, interest, or other cash in that is not a loan) Spending: (bills (including credit card payment), incidentals, groceries, etc. paid from cash) Credit Card Spending: Current Balance + Spending + Interest - Payment = New balance
2006-11-27 14:52:33
fosterlypuff22: First, I think your credit card purchases should be tracked in a separate column or sheet to give more visibility into what purchases you are putting on credit and you'll be able to track your spending better. Second, you shouldn't be tracking credit card money as income because that is not your money and you have to pay it back. Third, Your credit card payment should be tracked like a bill since its a fixed amount every month. However, You should just be careful about how many purchases you are putting on a card that you are only making minimum payments because most minimum payments are set up so that you are paying mostly interest instead of principle. In conclusion I would advise the following: Income: (should only include salary, interest, or other cash in that is not a loan) Spending: (bills (including credit card payment), incidentals, groceries, etc. paid from cash) Credit Card Spending: Current Balance + Spending + Interest - Payment = New balance
2006-11-27 14:52:33