What counts as spending money?

[snshijuptr]

When you are tracking your budget, congratulating yourself on a no spend day, or just being aware of your spending patterns, what do you count as "spending"? Would you count gift cards or gifted cash? Do you count cash out of your checking or a charge on your credit card? Do you count when you pull out cash from an ATM or when you spend the cash in your wallet?

Often times it is difficult to budget when you aren't sure what counts as spending and what counts as a transfer. An even trickier one is what do you count transferring money to a savings or retirement account? What about a transfer to a debt account?

The new articles on "Strange Spending" made me think of this because the definition of "strange" depends on the definition of "normal", and I don't think that we have an idea of what is normal.

[Joan.of.the.Arch]

This is probably the article you refer to. http://www.savingadvice.com/articles...-spending.html

I guess a "no spending day" is when I do no purchasing, regardless of where the funds came from. If I use a credit card that day, it is a spending day. If I took cash out of the ATM, but made no purchases, it is a no-spend day. If I used my debit card, it is a spending day. If I paid someone to edge my sidewalk, it is a spending day, even if it is a regularly scheduled expense. If I made a down payment on a mountain cabin rental it is a spending day, even if the transaction doesn't clear until next week and I won't be using the cabin until the end of next month. I would not consider my use of utilities such as phone, electricity, natural gas or even gasoline (all either paid for on a previous day or a future day) to violate a no-spend day. So if I used a gift card from my sister or from a survey site---yeah I would consider that spending. And like you, I don't think gift card use or spending of money earned by doing surveys is "strange spending." It's normal. It might not have been part of my regular income, but it is still a diminution of my resources when I use them. I've spent some of my financial resources.

I do see others using terminology on these forums and associated blogs differently than I would use it. One term that surprises me is "passive income." I found out that to some people passive income can still mean earned income. Those same online surveys are called passive income by some. Hmm, I've done some of those surveys before and for the amount of pay versus time made the pay a pittance. That wasn't passive. I put a lot of my time and attention into that measly $2. I earned it.

[snafu]

I follow Joan's definition but I view contributions to Retirement Fund or my Investment program as 'savings' or transfer.

[disneysteve]

I just read (and replied to) the article. Very funny because we had this exact conversation today. I do a lot of medical surveys and many of them pay me with Amazon credit. As of right now, I have accumulated $1,000 in credit. We buy the occasional book or DVD, coffee for our Keurig, filters for our Brita, supplies for our fish tank and a couple of other assorted things, but I earn credit faster than we can spend it. I told DW and DD today that we need to start looking at Amazon before we buy anything in the stores that we don't need right away. With the iPhone Amazon app, that is really simple to do now. For example, we were at WalMart today and were looking at a car adaptor for our iPhones. Before buying it, I looked up the item on Amazon. Not only did I decide to use my gift card credit to get it, it was $19 cheaper online than at WalMart.

As long as I use the Amazon credits to buy things that we would be buying anyway, it does free up money for other purposes, like investing.

[seen]

I just read (and replied to) the article. Very funny because we had this exact conversation today. I do a lot of medical surveys and many of them pay me with Amazon credit. As of right now, I have accumulated $1,000 in credit.

What surveys are you talking about? And how long did it take for you to accumulate that amount?

[jpg7n16]

I view spending as using an asset to purchase/pay for a consumer good. Whether that's cash or a gift card, it's still spending.

This article is misleading, because it ignores the income from the surveys. When she does surveys, they add money to an Amazon card. That's income... just not the normal paycheck kind. Which she notes in paragraph 4.

And money held on an Amazon card is an asset.

So the real reason she has more cash to invest with, is because she has a higher income - not because she pays with gift cards.


Moving from bank account to cash, or cash to IRA is not spending, it's just a transfer.

[disneysteve]

What surveys are you talking about? And how long did it take for you to accumulate that amount?

I'm a physician and do a lot of medical surveys and pharmaceutical market research. These are not programs open to the general public. I typically earn at least $150/month in Amazon credit and usually more than that.

[Seeker]

Interesting, spending is entire spending, I see what you are saying.

But I don't really consider gift cards and the like to be spending. Is that an attitude?

Gift cards, rebates, all that sort of income, just to me does not feel like "income".... so I don't really consider those as spending. I have not "earned" that money in my mind.

Does that make sense or am I just strange?

[disneysteve]

But I don't really consider gift cards and the like to be spending. Is that an attitude?

Gift cards, rebates, all that sort of income, just to me does not feel like "income".... so I don't really consider those as spending. I have not "earned" that money in my mind.

Does that make sense or am I just strange?

I don't think it is strange. I think many of us compartmentalize money in various ways.

If I walk into a store and buy something with cash or credit card, I do think of that differently than when I order something on Amazon with credit I got from doing a survey. In reality, it really isn't any different. Money is money no matter where it came from.

How I distinguish it in my mind, though, is that when I do our financial spreadsheet and list all of our assets, savings and investments, I don't include any credit I have in my Amazon account. No particular reason. I just have never counted that among our assets. I also have a pre-paid Visa card that gets reloaded from another survey company. I use that for grocery shopping each week so I haven't paid out of pocket for groceries for several weeks. Does that mean I didn't spend any money on groceries? Of course not. It just didn't ding our bank account at all.

[jasonnoguchi]

Basically, anything I spend on that gives me a receipt is a spending. I track my spending on these receipts monthly.

[Moviefrontier]

You paid for something,that is spending money

[maat55]

You spend money when you pay your mortgage. Spending itself, is not an issue, how you spend and save are. Are you getting the most bang for your buck? Are you buying a need or want?