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One of the issues that I struggled with when I first started using a credit card again was how to track my purchases. I use Quicken, and I have a number of categories for all of my expenses. I even had a category called “credit” that was leftover from my credit card mis-using days. However, I knew that I didn’t want to track things using a generic category like “credit”, because what would “credit” tell me about what I’d actually bought? Nothing. I wanted to be able to see exactly where I was spending my money at a glance, instead of having it fall into a black hole.

That’s when it hit me — I could just set up my credit card as an account in Quicken as well. This would allow me to track what I’m actually spending the money on. It also makes it easy to reconcile my credit card statement. So when I make a purchase using my credit card, I follow these steps:

1. Make purchase & place receipt in my planner while in the store.
2. Enter receipt into Quicken under the relevant credit card account as a debit.
3. List the payee & the actual category that the purchase falls into. (Such as Auto:Insurance, Dining, Personal:Haircuts, etc.)
4. Update the payment amount, which is listed as a deposit from my checking account.
5. My Quicken checking account is automatically updated with the new withdrawal amount.
6. Shred receipt if under $20 and not for a physical item that might need to be returned.
7. File receipt if it’s something I need to keep.

All of that red looks depressing, but I figure that’s actually a good thing. It keeps me aware of exactly how much will be automatically withdrawn from my checking account to pay my credit card — especially since I see the withdrawal coming up in my checking account as the payment date approaches. It feels like a real expense, which is a good thing since that’s exactly what it is. And, I can monitor how things stand with regard to my spending plan.

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