Approaching the Limit

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

There are still times when I can still be surprised by my finances; such was the case recently when I reviewed my credit card charges.  There was a time when I would check my charges on a daily basis, but that has changed recently, probably over the last 6-9 months.  I still check them at least once a week, but I don’t watch them like a hawk.

So, it was a surprise when I looked at my account online and saw that I was only about $900 away from my credit limit.  Since the limit on my card is $10,000, I was caught a little off guard.  When I looked into the details, there was nothing amiss and my finances were completely fine.

How I Got There

Not since I dug out of my financial hole have I been that close to my limit.  There are probably two main reasons why I was that close to going over.  The first is that I wait until my due date to pay the previous month’s balance.  I would rather have the money in my hands as long as possible.  So, when I checked, I was about a day or two away from the payment posting.  So, the nearly $10,000 in charges was actually for two months, not one.

The second reason is that I haven’t had a limit that low for quite some time.  For as long as I can remember, the joint card that my wife and I use has had a limit in excess of $15,000.  With a limit that high, I never had to worry about getting anywhere near it.  When I applied for the Citi card we currently use, they issued it with a $10,000 limit.  At the time, it seemed like it would be high enough and that I wouldn’t need to worry about going over it.  I still don’t think I need to worry about going over it, because of the confluence of events that occurred over those two months.

Spending

One of the culprits was holiday shopping.  Since I set aside money every month towards our gift fund, holiday shopping is never a big deal financially.  It certainly helps reduce holiday stress due to all the gifts that we buy.  Since both kids birthdays are also around this time, the present fund takes a pretty big hit over these two months.  All told, between the gifts we bought and charity we donated (it comes from the same fund); the credit card took a $1,300 hit.

Another culprit was medical expenses.  The bill for the little guy’s cardiologist was due, along with a couple of other miscellaneous medical expenses.  Since I just pull the money for the expenses out of my HSA, it was not of any concern for the budget.  The total however was just over $3,000.

The car fund also was tapped during this time too.  With routine oil changes for both cars and then a set of new tires for mine, the total was about $750.

The last of the big expenses were house related in some fashion.  It was time to have our septic tank emptied, so that was a few hundred dollars.

I also prepaid for some lawn service for 2016 to take advantage of a 10% discount.  I cut my lawn, but I found that I am not diligent enough with the weed control and fertilizing to have a healthy lawn.  Those two items totaled just over $1,300.

All of these items meant about $6,350 worth of charges hitting my credit card in addition to my normal monthly charges of gas and food.  Before I knew it, I was approaching my credit card limit.

It says a lot to me that I don’t have to worry about the credit card bill being paid.  All of these expenses were anticipated and saved for accordingly.  Sure, my savings account will look smaller once the credit card bill is paid, but I knew that was going to happen anyway.  By being able to use my credit card for all of these planned purchases, I was able to earn about $180 in cash back rewards.  How did your budget fair during the holiday season?

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