i used to categorize items as you mention into a ‘gifts’ category. other personal items would depend on what they would be, exactly. there was a separate category for ‘personal hygiene’, for instance.

i no longer have this setup due to the fact that i am attempting to move away from a hard core budgeting system. now i simply have: 1) savings; 2) bills; and if anything is leftover, 3) everything else (in that order).

kudos for not putting that watch on credit! i have not been using a credit card for day to day use in a month or two now. it can be a habit pretty easily (using cash, debit card instead).

fortunately, the SO and i have not yet purchased anything that wasn’t already on our shopping list at costco.

@ Asithi With margins over 50%, Costco must be making a ton of money from all the baked goods and hot dogs they sell. It’s probably the most profitable hot dog cart in town:)

By the way, thanks for commenting on my blog. In case you do not stop by for my response to your comment, here it is:

“According to a Canadian government study*, the highest gross margin items are in-store bakeries, with 51.2%. Second are prepared foods, yielding a 50.3% gross margin.

The lowest profit margin item is milk. Milk is often priced as a loss leader since customers usually come in looking for this product.

For a restaurant, the highest profit margin is the drinks. I have family that owns a restaurant and they tell me that the fountain soda cost about 15 cents, but they charge $2.50 for each soda. And a lot of restaurants still do not offer free re-fills on their drinks.

Thanks for commenting Scott.

*Canada Agri-Food Trade Service, “Overview of the Retail Grocery Market in the U.S. Pacific Southwest”
(December, 1997)”

Yes, it was a lot of money and for several years. The key now is to move that money into a passive investment and have the $2300 start earning money. The Starbucks was only building calories and not income.