Personal financial problems are getting worse with today’s economic stagnation. Hiring is almost non-existent, home values are continuing to drop and personal finances for many are in dire straits. With the gloomy economic picture being what it is information about how to keep financial health is critical.
Without exception, radio and television personal financial advisers such as Suzie Orman, Dave Ramsey or Gail Vaz-Oxlade host of “Until Debt Do Us Part” warn about the problems with improper use of credit cards. Applying restraint by eliminating credit cards and shifting purchases to a debit card you have a good start toward fiscal control.
Strong financial health is a form of discipline and a debit card can be a particularly good tool if the user can accepts the challenge. Whether it’s putting cash in bottles or envelopes, cash budgeting requires careful tracking and debit cards make that part of money management easy.
Write it Down
One of the first rules of financial control is keeping track of your expenditures. Because acceptance of debit cards is now so universal, a user can track every purchase, no matter how small, using a debit card. Since the transaction is automatically recorded you have an immediate record. At the end of the day you can see every dime you spent, and even create an electronic bottle, if you will, with check writing software.
Check writing programs are designed specifically to keep track and categorize your spending habits. So the first step is: write it down or download your information from your debit card bank into your computer check book, categorize each purchase, know where the money goes. You might be surprised to find that knowing what you’re spending your money on will help cut unwise or excessive types of purchases.
Where many people run into trouble is cash spending with no record or memory of where the money went. Restricting yourself to only using a debit card gives you an excellent record and allows you to easily analyze expenditures instead of guessing.
Credit cards can be very addicting because you may not check those expenditures until the end of the month and it’s easier to ignore mounting debt. With a debit card the mindset changes. You know that anything spent is not being added to a pile of debt, but is actually coming out of a checking account which is limited. The opportunity of using a debit card allows the ease-of-use of a plastic card but reminds you that there is a finite amount available.
Unfortunately, credit cards have a tendency to make a person feel there are no spending limits when that is exactly what it takes to keep fiscal outlays under control. Deep down most people know what to do about spending. The question is whether they have the guts to actually do it.
If you’re serious about keeping and improving your financial health, discipline is critical. By knowing where your money goes, developing restraint as you analyze every purchase, you can proceed to the final step: follow the advices of those who know.
Follow the Advice of Those Who Know
Whether it’s Dave Ramsey, Suzie Orman or Gail Vaz-Oxlade or even George Samuel Clason who wrote the “Richest Man in Babylon” clear back in the 1920’s, their advice is very similar. Get rid of debt, track and control your expenditures by budgeting and live below your means.
Using debit cards can help you do all three of those things. By dumping credit cards expenditures of all types and switching to what is, in effect, a cash basis using only a debit card, you’ll get rid of debt. By using only cash, which is what debit cards are, you’ll reduce over spending. You’ll find that it will be much easier to pinpoint those expenses you can cut from your budget.
Living below your means is one of the most liberating experiences you can have. It is a truth that literally sets you free. A debit card allows you to keep informed daily on what you’re spending so you don’t go beyond what you know you should spend.
Even the best fiscal advice is worthless until the individual chooses to take control of his or her fiscal life.