I’ve actually found a few apps that do something similar to this but mostly geared toward rounding up your purchases to the next dollar.

Good job finding a system that works for you!! I remember re-thinking purchases too when I first started tracking our net worth, asking myself – “will this increase my net worth or decrease it?” and since it was always the latter it helped me cut back much faster :) Spreadsheets are great for this stuff!

So we did eventually go back to using our credit cards, with two important rules:
1) we pay off new purchases *absolutely* no later than our next paycheck. We are extremely strict about this rule. Usually, we make our payment the same day of the purchase, and we laugh because frequently the payment will post before the purchase did. (This also has the effect of lowering our daily average balance, and so we pay much less in interest than we were before we started that rule.) We have a spreadsheet which tracks our “envelopes” for us, and if the money is not sitting in the bank, we don’t spend it on a card. With the exception of unexpected medical purchases, which we pull out of our very next paycheck.
2) We only use two cards, both of which earn cash back rewards, and we use each card according to the rewards it earns. So our Chase earns 5% back at Amazon, and 2% back at gas stations, restaurants, and the pharmacy, and 1% back on everything else. Our Capital One earns 1.5% back on every purchase. So if we make our purchase at Amazon or Walgreens, we use the Chase; Kroger, we use the Capital One.

Now, our trick is this: we pay the full price of the purchase when we make our card payments. Then when we cash out our rewards, it always goes as a statement credit. When we started, we were carrying about $2000 balance month to month on the Capital One, and about $6000 on the Chase. We have made additional payments to each (based on a very complicated spreadsheet where we are basically paying off old purchases and their interest), and we have used the rewards as completely bonus money. Eight months later, we now are carrying only $109.90 in old debits on the Capital One and only $3890 on the Chase. Our rewards cash out is now usually around $100, and is way more than our minimum payment on the Capital One, and is nearly the minimum payment on the Chase. We are still making our minimum payment in addition to paying off new purchases, as well, effectively quintupling our minimum payment each month on the Capital One and doubling our minimum payment each month on the Chase.

So our “spavings” is going directly to paying off debt. When the Capital One is completely paid off, we will still use it for some new purchases, but when we make our payment, we will pay 98.5% of the purchase to the Capital One, and 1.5% of the purchase to the Chase card, knowing that the Capital One rewards will keep the balance at $0. By our birthdays in May, we plan to have both paid off, and then we will pay 98.5% to Capital One and 1.5% to a school loan, and the same division with the Chase purchases.

This method is very rigorous sometimes, mostly because it requires daily diligence. And there have definitely been times that I have thought about making a purchase and thought, “I don’t want to deal with the spreadsheet tonight” and just never made the purchase. It’s a way of forcing that pain that comes with using cash, without the impracticalities of actual cash.

BOOM! Do it!

And then label the new account “Lucky Bitch” haha… brilliant.

Thanks ZJ :) Let us know if you end up giving it a shot!

Spavings indeed! And I would most def. add it to the account :)