The Debit Card Generation
By Robyn Collins
When is the last time you paid cash for a latte? If it was today, you are in the minority. Debit card purchases are at an all-time high as it becomes easier and easier to simply swipe to pay. The convenience of a debit card is unquestioned. However, there are some backlash effects to this trend.
Depersonalization of money: as we begin to touch our cash less and less, we forget that it is actual money. We do not see it dwindling in the same way as those who carried a money clip as they peeled off bills to pay their way. We don’t feel the lightening of coins in our pocket as we purchase a soda. It is a case of not believing because we do not see. This can be detrimental to your financial life.
When is the last time you opted not to purchase something, instead of seeing if you could get the card to run,—since you don’t know your actual balance anyway. Probably, you take a chance, see if the card will go through. Unfortunately, debit card companies allow this because they can charge hefty fees. One friend of mine ended up with $350 dollars in overdraft charges because of this. One $1.65 coffee was $36.65, and he and his wife collectively accrued 10 charges this way. Now, the good part is that they avoided being embarrassed, but seems like kind of a high price to pay to retain your dignity.
How to make your money personal again:
There are online services that you can utilize to track your expenditures, your income, progress in your various accounts, etc. There are even a few that go farther and have created communities that allow users to share victories and confessions with one another in regard to their finances.
One such company is Geezeo, (www.geezeo.com). Their analysts share trends and common pitfalls. The social element offers the accountability that most of us need to help us make better choices. The flavor of geezeo is friendly and approachable, with a “Heya, Robyn” when you log in and copy that makes you chuckle while you count your pennies. Options to set particular savings goals and debt reduction plans make this user-friendly site a pleasant part of your money management plan.
There are other products, like Quicken and Microsoft Money that also allow users to track their finances on their computer. They offer similar services, and are excellent ways to follow your spending, and adjust your patterns of financial behavior.
If you are not watching your dollars leave your wallet, and you’re not tracking your status on your computer either, chances are that you are going to have a problem sooner or later. This generation, that is so used to throwing down the plastic for immediate gratification has the potential to inflict pain on itself and society with its potential for bad debt. On the other hand, technology and efficiency can be the greatest gifts when we are attempting to get a handle on managing our money. Using the tools effectively to know yourself, your money and your spending habits is crucial to your eventual financial freedom.
What about international debit card use?
You have to be on the alert when traveling from the US to other countries. Like banks in the US, International ATM machines will charge a fee when you use your debit card at an ATM that is not owned by your bank. The amount is determined by the ATM owner. Most fees are under $5, a notice on the ATM machine will tell you what the fee is. More than $2 is too much, and you should look for another ATM machine.
The real fee problem with a debit card comes from your own bank, because the card issuer may charge you up to 3% for a foreign transaction, including an ATM withdrawal. Call your bank before you leave your home country. If you don’t like the fee, you might call around and ask what other banks are charging for foreign transactions made with a debit card.
The bottom line, you are in charge of your financial destiny. There are tools out there that can help you along the way, but at the end of the day, you have to be educated and diligent when it comes to managing your money. The more up close and personal you can get with your expenditures and incomes, the greater chance you have for making your money work for you instead of against you. Be personal with your money, watch what it’s doing online, and be aware of secret and surprise charges and expenses. You are the only one looking out for you, be diligent with the hard earned money in your care.
Robyn Collins is the author of Prepare to Be a Teen Millionaire, a contributing writer to Millionaire Blueprints magazine and the senior editor of Millionaire Blueprints Teen magazine, a columnist on several sites, including The Leader World Online magazine. To contact Robyn regarding writing and speaking requests, email robyn[@]mbteen.com. You can also reach Robyn at the Geezeo group, Millionaire Blueprints Teen.
June 27th, 2008 at 5:15 pm
Hey Robyn,
Great post and so true, we tend to use cards as if they’re nothing more than a convenient piece of plastic, heck with the consequences. You have a couple great lines in this article, but my favorite is your closing “You are the only one looking out for you, be diligent with the hard earned money in your care.” Hopefully you convinced a few people to take control of their finances. Win as many over to our side as you can.
Cheers,
Odd Lot
http://www.Money-and-Investing.com