Tracking your Dollars in the Digital Age
By Kate Vaillancourt, Certified Credit Union Financial Counselor (CCUFC)
There is no denying that technology has changed the way we spend and keep track of our money. Back in the “old days,” many of us had only two ways to take money out of our accounts, which typically involved writing a check or visiting the credit union. There weren’t many transactions and as long as you kept your check register up-to-date, it was pretty easy to balance at the end of each month. Today, many of us use our debit cards multiple times a day, which can be a lot of transactions to keep track of — so many, that some of us don’t even bother. Why should we when we have our account balances at our fingertips any time of the day? Does anyone even balance their checking account anymore?
Online banking and debit cards have made our lives easier. We don’t need to carry cash and we can get it from an ATM if needed. When compared to a credit card, debit cards have no annual fees or interest charges on purchases and your spending habits don’t affect your credit score. However, unlike a credit card, your spending limit depends on your account balance and you might find yourself with overdraft fees or money spent more quickly than you realized. The reality is that debit cards can be both a blessing and a curse, much like my cat, Roxy. She loves catching mice but instead of eating them, she lets them loose in the house. She’s sort of doing her job, but instead of peace of mind, she brings chaos to my life.
While I can’t image going back to life without debit cards, I’ll admit they make it all-too-easy to spend money that might not be available. Holds can expire before funds are withdrawn, only to be withdrawn at a later date; automatic deductions can be forgotten, or we’re just not paying attention to our spending as closely as we thought we were. I’ve experienced all of these at one point or another. “Hi, my name is Kate and I have been careless with keeping track of my money.”
Over the years, I’ve tried different ways to keep track of my spending, especially the kind of spending that isn’t exactly in my budget. You know, the lunch out because I forgot mine at home; the cute pair of shoes that I just had to have; or the adorable neighbor kid selling cookies and wrapping paper. I can’t go without eating, I NEED those shoes, and who can resist cookies, especially from that cute, little salesperson?
The system that I eventually settled on and works best for me is to have a completely separate checking account and debit card for those extra, less-important transactions. The play money (for lack of a better term), doesn’t mingle with the bill money, and that means I don’t have to worry about accidentally spending the bill money. When the play money is gone, it’s gone — but I can rest easy knowing that my obligations will be taken care of. This system also helps me put money in my savings account and keeps my spending in check. If only have $50 left to play with, do I really need that [insert frivolous desire here]? Maybe yes and maybe no, but I’m forcing the question and that helps me make better decisions about my spending.
What works for me might not work for you, but that doesn’t mean there isn’t a system out there for you. If you are struggling with keeping track of your spending or have had one-too-may close calls with your account balance, I can help. If you’d like more personalized help with keeping track of your finances, please reach out to me by sending an email to kvaillancourt@acadiafcu.org or by calling 207-992-1060. Financial counseling services are free to members of Acadia Federal Credit Union.