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Debit Cards Can Ruin your Budget

Updated on February 19, 2011

the debit archade

And what you can do to fix it

If you are setting up a budget, one of the fastest ways to destroy it is the bank debit card. When you are tracking the amount of money you can spend in any given time frame, it can be easy to overlook the amount small purchases made on these cards.

I have worked on budgets for households and small companies and it seems the one thing that the people in trouble have in common is the debit card. It has becomes increasingly aware to me that people don’t take into account the small purchases made on these cards. I have see bank statements that will have fifty or more small purchases in just one month.

People, for some reason, think that ten dollars here or five dollars there doesn’t mean much. People fail to realize that over a period of time these small purchases really add up fast. I suppose it easy to just whip out the card whenever they want something, verses taking a twenty out and paying cash.

Also, in households where couples share the same bank account and both have debit cards, keeping a budget on track can be extremely difficult. This is even more evident when only one person is in charge of the finances, which happens in most families. The ability to track spending becomes more and more difficult when expenditures are for small items and the request for receipts are ignored. I’ve seen this first hand and it can cause resentment from the person spending the money to person tracking it. The most common thing I’ve heard is “it was only ten dollars” or something similar.

Now, what you can do to try and fix this part of your budget. It’s called an allowance. When you make your budget make a cash allowance for small expenditures. Each week take a certain amount of cash out of your bank for the small stuff. This will allow you to subtract the cash from your budget without relying on receipts from debit cards. Once you have dispersed the cash, make it a rule there is not to be any more purchases once the cash is gone. Cash is something physical that you can actually see and often times cash leaving your hands is more difficult than just sliding a card.

Over time, getting use to keeping that card in your wallet or purse becomes easier and easier.  In turn, tracking your budget gets easier and easier. I know that habits are hard to break and the urge to use that card won’t disappear overnight, but as time goes on you will thankful that you did.


If someone ask you how much you spent on your debit card monthy

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    • cheapsk8chick profile image

      cheapsk8chick 7 years ago

      Great advice! I whip that card out for all kinds of little things and it does add up!