Which Payment Type Can Help You Stick To A Budget?
Sticking to a budget can be an important part of managing money wisely. It can make the difference between having enough for whatever you need and always living paycheck to paycheck. There are lots of ways to track your budget, from using spreadsheets to setting up a simple home budget binder. However, sometimes it might be difficult to know which type of payment is the best to handle your budget and stay in the clear. In this article, we’ll look at the various payment type options and what they offer to help you stay within a budget.
Cash
Cash is still a popular form of payment, particularly where small amounts are involved. It’s easy to use and can make it simpler to track spending by literally counting the money in your wallet or purse. The downside is that it leaves you more vulnerable to theft if unattended and it is difficult to trace if lost.
Debit Cards
Debit cards act like a form of cash because they draw from the money stored in your checking account. This makes them easy to track as each expense you make will show up on your bank statement. However, it can be difficult to keep a gut-check on your spending when you don’t have to hand over a physical amount of money. To make sure you don’t overspend, you’ll need to be mindful of your budget each time you make a purchase
Credit Cards
Credit cards can be an easy way to spend money without having the funds in hand. You can receive bonus points for certain purchases and even cash back rewards. They also provide a stronger level of identity and fraud protection if your card is lost or stolen. However, a credit card is not a good option for those who struggle with impulse purchases as it adds an additional layer of immediate gratification.
Digital Banking and Mobile Payment
With the rise of technology, digital banking and mobile payment have grown in popularity. This payment type is convenient and can provide you with real-time updates on budgeting apps and notifications. In addition, you can use a variety of options such as Apple, Google, or Venmo to transfer money between accounts and track spending. On the other hand, it can be difficult to establish a feeling of accountability for money spent if it’s hidden behind a screen.
Pre-paid Credit Cards
A pre-paid credit card is similar to cash and debit cards in that you can still use them at most places. However, instead of drawing from an existing bank balance, you’ll load it with money up-front. When the money is gone, you can no longer spend with it. This can be a great way to control your spending and set limits for yourself, but it also makes it impossible to build credit.
Contactless Payment Schemes
Contactless payment schemes like Apple Pay and Google Pay allow you to pay with your smart phone by simply scanning a barcode or tapping a special chip reader. This eliminates the need to carry a debit or credit card and makes it easier to track your budget as you’ll receive a receipt directly on your phone. Unfortunately, these options are still fairly new and may not be accepted everywhere.
Checks
Checks can be a great option if you’re trying to control your budget. You can’t spend more money than you have in the bank and there is no grace period to make additional payments. However, writing a check can be tedious and time consuming. Since it also uses bank balance, it is important to make sure you haven’t miscalculated your spending and be sure to enter the bank details correctly.
Sticking to a budget is an important part of healthy money management and the type of payment you choose can make a big difference. Cash is useful for smaller amounts but it is susceptible to theft or loss. Debit cards and checks provide security but can be tedious and time consuming to use. Credit cards can come with bonus rewards but offer little accountability for impulse purchases. Digital banking and mobile payments are gaining popularity and pre-loaded credit cards are a great way to set limits. Whether you choose traditional or more modern payment options, the most important thing is to keep an eye on your budget and track expenses.
