How to enter a rebate when tracking expenses

Occasionally, I will get office supplies or food items with significant mail-in rebate discounts.

What’s the proper way to input the savings when you are tracking expenses?

I will share my tactic below.

(On a related note: I should mention I have never once had a rebate declined, in contrast to the horror stories I have heard. I have generally just followed the instructions of including UPCs and my mailing info.)

There are really two ways you can enter the rebate.

One way is to deduct the savings at the time of purchase. If you spend $100 on supplies, and expect to get a $20 rebate, you could just go ahead and enter the expense as $80.

This system works out fine mathematically, but I am not a fan of it for two reasons. First, if you forget to mail the rebate, or it does not get redeemed for any reason, then you are under-estimating your actual expenses. Second, there can often be a long time between making a purchase and actually getting a rebate, often two to three months. That’s a lot of time for something to go wrong in the rebate redemption process, so it’s best not to enter the rebate just yet.

My system is to input the rebate when I get it. The part that requires some care is entering the rebate correctly.

In the simple expense tracker, my free budgeting spreadsheet, all of the expenses are positive numbers. If you spend $20 on food, you enter it as a positive number $20.

When you get a rebate, you are reducing the amount you spend. Thus rebates should be entered as a NEGATIVE number corresponding to reducing an expense.

In the simple expense tracker I made, this is how to record a hypothetical $20 product rebate.

As you can see, the rebate is entered as a negative number since it is money you are receiving.

And that’s it–you’ve entered the rebate correctly and all the summary formulas will flow correctly.

If you want to learn more about why to track expenses, read this introductory article.

If you want to download a free spreadsheet to track expenses, visit the Financial Tools page.