Posts Tagged ‘debit card’

What is a Debit Card?

Monday, July 28th, 2014

Untitled-3A debit card looks like a credit card and works like a credit card – but it isn’t.

It’s simply a more convenient way to pay for something than writing a check or digging money out of your purse or wallet.

You can also use a debit card to withdraw money from an ATM.

Many banks offer free debit cards with your checking and/or savings account.

When your pay for something with a debit card, the money will be deducted (either immediately or within a few days) from your bank account.

Unlike a credit card, there is no application or approval procedure for a debit card. And using a debit card will not affect your credit rating in the slightest.

Using a debit card to pay for most (if not all) of your purchases may provide you with a safer alternative to carrying cash.

If you lose your debit card, contact your bank immediately and have them put the deep freeze on it.

TIP: Think before you swipe. Ask yourself: “Do I really need this?”

Question: Are there any disadvantages to using a debit card?

Answer: Possibly.

Would you be more likely to buy things you don’t really need if you only had to hand over (or swipe) a piece of plastic? As opposed to real money?

Although there are no fees associated with using a debit card, you may find yourself spending more money with a debit card than you would if you had to write a check or pay cash for your purchases.

If you’re not careful, you could also overdraw your bank account (or go below the “minimum balance” for your account) and have to pay a &%$# fee.

A Painless Way to Save Money

If you don’t use a debit card and instead pay cash for your purchases — and then piggy bank the coins you receive in change — you will (after a year or so) find yourself with several hundred dollars in “free money” (after you emptied the piggy bank onto your kitchen table and rolled the coins).

Don’t spend time beating on a wall, hoping to transform it into a door.
— Coco Chanel

Now is the Time to Create a Real World Food Budget

Thursday, July 24th, 2014

Let’s face it, we can spend a lot of money — too much money — on food!

In his best selling book, The total money makeover : a proven plan for financial fitness, Dave Ramsey suggests that families spend somewhere between 5-15% of their monthly income on food, and he includes eating out.
cheap-meal

The United States Department of Agriculture has published a food budget plan chart for individuals and families:

  • Thrifty plan
  • Low-cost plan
  • Moderate-cost plan
  • Liberal plan

Official USDA Food Plans

Click here to view the Official USDA Food Plans: Cost of Food at Home at Four Levels.

Food Budget in the Real World

For example, a single fellow, age 49, who needs to cut expenses and lose a few pounds (or 20) could select the “Thrifty” plan and spend no more than $187.70 per month on food (which is $46.88 per week).

At the beginning of each month or week, he could withdraw that amount from his bank account and pay cash for all of his food purchases. (The coins he receives in change could go into a piggy bank to be rolled at the end of the year for a “surprise” windfall.)

This chap would need to be frugal because when that money is gone, it’s gone until the next week (or month).

Afraid of Getting Mugged? Use a Debit Card Instead

Another option would be to use a debit card; graciously accept your receipts from the cashier (or food serving person if you’re dining out) and carefully total up the costs for your food purchases.

Hang tough! Do not exceed the costs for the food plan you’ve selected.

TIP: Think cheap and healthy when you’re shopping (canned fruit is good, Doritos not so good) and never shop when you’re hungry.

NOTE: Read about debit cards here.

No body is worth more than your body
— Melody Carstairs