I’ve been hearing a lot from people recently about the Amazon problem – “friggin’ Amazon”, someone called it. Another said “so I’m normal to have problems with this?”, someone else at least got some use out it by using the boxes for moving.
Amazon is a challenge (and I can’t help feeling that it’s not entirely accidental). When you’re categorizing your budget, if there are a lot of charges from Amazon it can be really hard to tease out the categories to put them into. The order list on Amazon itself is not clear: while it does show the total for each order, if you want to see the dollar amount by item, you have to click through. So if 2 items were groceries, 1 was clothing and 1 was furnishings, that’s 8 clicks to find the amounts for just that order. And in addition to that, the charges that hit your bank account often don’t match the order total because there can be changes due to sales tax, or items that are shipped separately. So it’s a mess.
One answer, of course, is to just have a category called “Amazon” and put everything in there and leave it at that. The problem with that is that then you really don’t know what you spent that money on. It’s like the online banking category “other shopping” – it could be anything. So that means, in turn, that you don’t know how much you are actually spending in each of your regular categories like clothing or groceries, because some of it is lost in Amazon. It’s some kind of slush fund. Which in itself would be fine if it were small, but for many people it’s multi-hundreds per month – that’s a big slush fund.
A mystery slush fund is a problem if you are trying to reduce your spending in order to meet other goals like saving, paying down debt or just living within your income. Since you don’t know what you spend the money on, you don’t know if you can reduce it or not. And you can’t really track whether you are succeeding when you try.
If you need a precise budget, unfortunately Amazon needs to be unraveled.
There are multiple ways to do this, but all of them are manual. You can go through the list of purchases in your Amazon account (with your partner, if there are two of you) and split out the charges in your bank statement accordingly to categorize them. Or you can keep a list of purchases somewhere – either on paper or phone notes – and use that at the end of the month. Or use a more manual spending tracker, and actually punch in each purchase with its category as you make it. So there are several options, but each of them requires a bit of attention.
One tracker that I have been introduced to recently that I am quite excited about is the “Spending Tracker” app for iPhones, and it has this manual function. It’s a very simple app where you tap in each purchase as you make it, and categorize it right there. No accounts to download, and the app can sync between multiple devices, so you can work together with your partner. It is unfortunately available only for the iPhone, so look into AndroMoney as a possible Android equivalent. (I have no affiliation with either of these apps.) This could be a good answer for the Amazon problem.
Amazon is not the only retailer where this is an issue.
Places like Target and Costco are similar in that they carry multiple categories of items and receipts need to be teased apart. The trick is to figure out where the limit on this is, so you don’t drive yourselve crazy. For example, in my world, anything that I buy at a grocery store is “groceries” – that receipt is close enough that I’m willing to call my shampoo and catfood “groceries”. But buying clothes, peanut butter and a TV set at Costco just can’t be called one category!
So if you have been wanting to save more, free up some money for vacations or other goals, or just live within your budget, consider how you can tame Amazon. It really is a problem, you’re not imagining it – everyone is struggling with this.
In other news, I am happy to announce that I finally have an on-line scheduler! If you need an appointment, you can find me at https://calendly.com/moneymindful and book directly there. The link is in the signature of all my emails. For new clients, I still schedule all free consultations myself, so anyone who hasn’t worked with me before can contact me by phone or email to schedule. Note that my December schedule is filled, and I will be closed from the 20^th through the end of the year. Back in the office from January 3^rd! There are plenty of spots in January if you would like to do an Annual Check-up and make your plan for 2022.
As always, let me know if you have any questions at all. It has been a pleasure working with all of you this year. Thank you for your trust, and I hope that you are feeling more solid about your finances. I wish you all the best for your end-of-year, and look forward to seeing everyone in the New Year.