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Put Away The Check Card

By: Joshua Unseth-- 2010-02-12 5:00 am --

If you're like most people, then you probably use a check card or a debit card to make the majority of your day-to-day purchases. These days, most banks and credit unions offer these cards to their customers for the sake of convenience; because these cards often have Visa or MasterCard logos on them, they can be used anywhere that such credit cards are accepted. Unfortunately, it's all too common for people to use their check cards for virtually every purchase they make. In doing so, it's easy to overspend - or to end up with a negative bank balance and a lot of overdraft fees.

The Problem With Plastic
Swiping a check or debit card when making a purchase can take a bit of the reality of out spending money. Even if you know you're low on cash - or that the purchase you're about to make isn't all that necessary - it's easy to push those concerns aside and whip out your check card. In the space of a single day, you can use your check card several times, slowly whittling away your checking account balance all the while. When your bank statement arrives, unpleasant surprises often do, too.

Cash In Hand Keeps You Accountable
If you find yourself getting into financial trouble because of overly enthusiastic check card usage, there is a way to mitigate the problem: carrying cash. As old fashioned as it may sound, having to count out twenties, tens, fives and singles to pay for something brings home the reality of just how much you're actually spending. As you watch your stack of cash slowly wither away, you're getting a clear reminder about how much money you're flying through.

Divvy Up Your Cash On Payday
A great way to stay within your budget is by carefully divvying up your cash on payday. Pay your usual bills, then determine a reasonable amount for various daily expenses. For example, you might set aside $100 for your lunches for the month, or $50 for incidentals. Take that money and put it in separate envelopes; label each one with its intended purpose. Each morning, take the cash that you intend to spend out of the relevant envelope. When it's gone, it's gone - don't cheat! You'll be amazed by how much less money you spend by using this method.

Put Leftover Cash In A Savings Account
Although it won't always happen, there's a very real chance that you'll end up with extra cash in those envelopes at the end of certain months. Instead of running out and spending it on frivolous things, make a habit of putting it right into a savings account or a "rainy day" jar - or use it to save up for something special, like an HDTV or a new computer. Once you reach your goal, you can spend that saved money with a clear conscious, knowing that you've been sticking to your budget. Reigning in your check card use is a really great way to live more frugally.