In this technologically advanced world we have the tendency to use our credit and debit cards wherever they are accepted. However, with consistent credit and debit card use it is deceptively easy to spend much more than we earn.

Here are several tips to help reduce our ever growing dependence on easy, fast cash.

How often do you reach for your credit card? It’s easy, convenient and leaves a little extra cash in your pocket. The problem for most of us is that we don’t track our spending or our credit card interest rate. Have you looked at your interest rate lately? How about your credit card fees?

Before you leave your card at home you need to check your fees and interest rates. Examine your previous credit card bill and look for any suspicious fees or an increase in interest rates. Many credit card companies sign customers up with various monthly fees that the customer does not need or use. Check for the fees and then do some research on the internet. Decide whether you really need the credit card insurance or whatever else you are signed up for.

Next you want to make sure you are paying the lowest possible rate possible on your card. Do you earn points on your card? Do you pay a yearly fee for your card? What are the benefits of the points you are using and the yearly fee? What extras do you really gain? Some people get free gas and others free groceries. Take some time to write down exactly how much in free groceries or gas you have received. If it is more than the yearly cost of the card then you are saving money! If not you may want to consider cutting the fee and the extra points.

Call your credit card company and reduce your yearly interest rate to the lowest rate possible. Many companies do not want to lose customers and if you are a “good” customer and use your card regularly then they will want to keep you! Tell them if they can’t lower your rate you will be consolidating your card with your other cards and will no longer be using their service. Your chances of successfully lowering you interest rates are pretty darn good!

ATM’s may seem like a great idea for fast cash but in reality it is reaching into your pockets and taking your extra cash. ATM’s routinely charge a flat rate fee for each withdraw you make and so does your bank. You are actually paying anywhere from three to five dollars every time you withdraw money. And honestly, how many times have you gone to the ATM this month? Ten visits will cost you between thirty to fifty dollars!

Find out from your bank how much each financial withdrawal will cost you. Ask them if they charge any additional fees when you use your bank card. Is there a monthly fee involved?

Look at your bank statements every single month and scrutinize each charge. It is critical to know where your money is going. Keep in mind that many banks that claim to be “No Fee” banking still charge fees. Read the fine print and find out where your extra cash is going.

Successful budgeting requires that you know how much money you have each month and where you are spending it. One of the easiest ways to budget is to stop using cards and start using cash. Every month withdraw a lump sum from the bank. Divvy up the lump sum into portions. Use a portion to pay off your debt and then use the rest of the portions for monthly expenses including rent, car and food. When creating a budget it is important to pay yourself an “allowance”. Everyone needs a little fun money for a fancy coffee or a trip to the movies. Pay yourself a small portion each month.

The key to this strategy is to leave your credit cards at home and keep your bank card tucked away in your purse or wallet. Use cash and chances are you will spend less because you will see where your money is going and how you are spending it. Keep a tight hold on your money and think twice before you splurge on something your do not need and is out of your budgeted price range.

Organization is a critical component to saving money. Keep a money journal and track your daily spending. Not only will you be surprised by your spending habits but you will be better able to determine where you tend to splurge and where you have to cut back.

Track and file your credit card and bank statements so you can refer back to them if needed and so you can continue to monitor spending habits and additional card or bank fees.

By following these tips and reducing interest rates, bank fees and spending habits you will be sure to have extra cash to stash away each and every month.

© Krista Tannahill 2009 - Permission to republish this article in print or online must be granted by the author in writing.