Wednesday, December 30, 2009
Spending by debit vs. cash could save you money
Reaching for your debit card instead of paying by cash is one way consumers might be able to get a better handle on the money flying out of their wallets, one study suggests.
According to a survey commissioned by Visa USA, on average, consumers reported that they lose track of about 20% of the cash they spend in any given week (cutimes.com).
Unlike credit cards, paying by cash helps ensure you aren't spending what you don't have. The downside of using cash is that all those small daily purchases you make, like soda, postage stamps, and chewing gum, add up quickly. If you aren't tracking where all that cash is going, your money is gone and you don't even know what you've purchased.
Making purchases by debit card provides you an information trail on your transactions. And if you use a personal financial management system, categorizing your transactions by purchase type or merchant may help you better determine how you can tweak your spending habits and save more.