Using A Debit Card To Control Spending

06 May Using A Debit Card To Control Spending

Many of my clients ask me about ways to control spending after bankruptcy.  For these people I recommend a debit card.
With a debit card you never need to worry about carrying around cash.  If you carry cash then your money has a tendency to disappear.  For example, you take out $20 from the ATM and go into a store, where you purchase $18.43 worth of groceries.  The single dollar and change go into your pocket, and soon disappear as minor purchases are made.  At the end of the day you’ve spent $20.
Turn the tables and make this a debit card purchase.  Go into the store and spend $18.43 on groceries.  Leave the store and go about your day.  Chances are excellent that at the end of the day you will have spent $18.43, not $20.  Why?  Because the extra cash in the first scenario is too small for you to take note of.  When you spend it, you don’t notice it – a pack of gum, a newspaper, maybe something to drink.
This runs counter to the tact taken by Debt Hater, who is giving up the use of a debit card in favor of cash.  She’s going so in order to curb her “flex” spending, and I’ll be interested to see how this works out for her.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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