Whether it’s a new resolution to spend less or plans to save towards a specific goal, changing your money management habits is a lot easier with a good debit card.
With more and more of us reaching for debit cards over cash or credit, these convenient pieces of plastic often end up holding a lot more than just our closing bank balances.
But despite the range of features and resources they provide, debit cards are associated with spending, rather than saving.
So here we take a look at three things you can do with your everyday banking card to get what you want out of your money.
1. Keeping Track Of Spending
Most Australians now pay by card at the checkout and online, which means your bank statements have a wealth of information about where you spend your money.
Checking out your debit card transactions gives you a chance to see how it all adds up and develop a more specific budget that will help you save as much as possible.
By using your debit card account data and tools like MoneySmart’s budget planner, you are able to look at how much you spend on things like groceries, bills, clothes and more over the months of a year.
It is often a good wake-up call for people and, as MoneySmart notes, “often it is the everyday little things that end up costing you more,” so the devil really is in the detail.
Once you see all those details laid out, it is just a matter of setting spending goals to stick to your savings plan.
But even if you do not want to follow a strict budget, checking out your transactions could be a wake up call when it comes to excessive spending in one category.
If you can find just one thing to cut down on – such as a daily cappuccino at work – you could save hundreds of dollars over the year.
2. Control Your Limits
Debit cards are usually linked to everyday accounts that also hold the bulk of people’s money.
But if you are the kind of person who finds that you spend more than you mean to, you can also take action to limit how much money you have access to.
Things like transferring money to pay bills and contribute to savings as soon as you are paid, for example, will give you a better idea of your balance after expenses so that you can work your spending around that.
Alternatively, you could open another account for certain types of shopping, or get a prepaid debit card to help you think more about your money before you spend it.
Another advantage to favouring your debit card account is that it reduces the fees from other options, particularly credit cards.
According to research from NAB, a lot of us still use credit cards for bigger purchases, but making a conscious decision to switch to using your debit card will save you money on interest and reduce the chances of racking up debt that could foil your financial plans.
3. Special Features
More and more debit cards are becoming fee free, which means competition is showing up in the form of additional features that can add value to your account or your lifestyle.
The ANZ Extras Package, for example, offers a suite of insurance options, shopping discounts and more.
Citibank’s Plus account, on the other hand, gives you instant money transfers to Citibank accounts overseas – a very convenient feature for globetrotters and international business professionals alike.
All Citibank debit cardholders also get access to the bank’s award-winning Dining Program, which gives you a complimentary bottle of wine when you dine at a participating restaurant and pay by card.
There are even cards with features that could help you meet your savings goals, like the St George Sense account, which rounds up your debit card transactions to the nearest dollar and puts the rest into your savings.
St George has also added expense categories to SENSE account statements so that it is easier to meet savings targets and track spending.
The result is a comprehensive statement with graphs and pie charts that make budgeting easier, but as the bank states “to maximise the benefit of transaction groupings you should use your Visa Debit Card or FreedomCard for as many transactions as possible”.
While there are not currently a lot of debit cards that offer such thorough analysis of statements, there is potential for other banks to follow suit with new debit card options in the future.
The real point of all these features is to make managing money simple for you when you use your debit card.
But the most important thing is to find a system that works for you. That could mean using debit more, or keeping cash in your wallet for certain purchases or even using a credit card – it really depends on what you prefer.
Knowing what you can get out of using different banking options, though, will help you make small changes that add up to bigger and better goals in the future.