Finance / Self Improvement



Something we all have struggled with at one time or another is the struggle with money. Well, in an ongoing series, we will outline the best ways to save some money so the struggle will be a little less “real”.
Step 1: Stop using your debit card
You heard me right. Stop it. Put it away. There are many reasons for this, but let’s outline just a few:

Banks made $11 BILLION dollars from overdraft fees in 2015. That’s correct, in ONE YEAR, they made $11 billion dollars from people spending more than they thought they had. Or worse, by people making the decision to spend money they knew they DIDN’T have.

Let’s say you overdraw your account by $20, Many banks charge a $35 overdraft fee and many also charge an overdraft extension fee of $5 per day. In most cases, banks are way more expensive to use than payday lenders. A typical payday lender charges $25 for every $100 borrowed per week (which in itself is a terrible financial decision, but we will tackle that in the future).

In our example above, you are spending $90 to borrow $20 at a large national bank. That is an interest rate of 1750%. This is the exact opposite of a good decision. This is literally the only time we will ever write this, You are better off going and getting a payday loan (PSA: THIS IS NOT RECOMMENDED) than overdrawing a debit card.

Most banks do offer theft protections but can take days or WEEKS to re-deposit your money. When your debit card number is stolen the thieves are taking YOUR money. When they steal a credit card number, they are stealing the BANKS’ money. Use a credit card if you need to use plastic for any reason, but even better…

Banks still offer ATM cards rather than debit cards and it is more difficult for a thief to take our money from an ATM card than a debit card. When we need money, head to YOUR BANK (or one of their ATM’s. You don’t want to pay the fees at another banks’ ATM if it can be avoided).

The best reason to use cash is their is a tactile feeling to spending REAL money. The feeling of swiping, tapping or handing over a card is just not the same as the feeling when we look in our wallet and are down to your last $23. We make better decisions with our money when we have a real-time sense of how much money we have.

Another benefit is to the business where you are making a transaction. Most debit card and credit cards charge transaction fees of up to 3.5% to the BUSINESS plus a swipe fee of .10-.35. These fees are even higher for smaller businesses (who don’t have the power to negotiate the same way the Wal-Mart and Amazon corporations do).
That is it for today, but we will continue to save you more money with future articles, so check back often.


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