Pay it forward. It helps keep the budget in line.

I'm on a new kick.  Laundering money.  At least it feels that way...

We all know that a cardinal rule of personal finance is, "Don't spend money you don't have."  Easier said than done, right?  I have a Upromise MC.  We're trying to stuff a few extra bucks into the 529's we have set up for the kids.  Upromise gives 1-5% cash back on all purchases made with the card.  It's not a ton of money but we might as well get something for spending.

One of the features I like most about this cc, unlike other cards (Amex, etc.) is that I can transfer more money to the card than my current balance.  I love it!  It's a great budgeting tool.  I can better plan out and pay for the coming week of spending with $$ I HAVE.  Remember the days before the now ubiquitous online account management/billing/payment functions?  Get that cc bill and hold your breath opening it to see what the damage was for the month?  That was like driving a car on the highway blindfolded!

My Sunday planning exercises consist of the basic coupons, store specials, and road map of the week (where and when I will make stops based on the weekly menu, etc.) but there is also the budgeting exercise. Paying Forward the money that I currently have, over to the the money that I plan to spend.  I roughly calculate what I can and will spend for the week.  This exercise helps to make better pre-decisions about what to buy and what NOT to buy based on the $$ I actually have.  I then move that money out of checking and over to Upromise.  I just turned my credit card into a debit card, while reaping the benefits of the credit card.  I'm using the cc as a vehicle to get something for, well, nothing.  It's also insurance against paying an outrageous rate for the "privilege" of the monthly minimum.

Transactions show up in the account almost instantaneously.  I'm addicted to my balance, check it probably too much but I am always aware of what I have and what I owe.  PAID IN FULL ahead of time has a much nicer feel than opening up that envelope, or email for the mystery amount...

I'm sure it's not how the credit card companies drew it up but good planning and paying it forward can give you a better handle and a more realistic view of your money from week to week.


Dari said...

Love it! I have a Upromise account that I use for mcdonald's gift cards, travel, shopping at ebay etc to get money into 529's, but I didn't know about this feature of the credit card. I may just have to check that out!

Here's my post on ways to earn with upromise - I LOVE getting this $ without even thinking about it... http://www.mominmanagement.com/261/upromise-free-way-to-save-for-college/

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