Comments on: How to use a separate debit card for discretionary spending http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Wed, 17 Mar 2010 01:35:51 -0700 http://wordpress.org/?v=abc hourly 1 By: Automating Our Travel Budget | LifeAfterCubes http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-119621 Automating Our Travel Budget | LifeAfterCubes Thu, 26 Nov 2009 12:52:46 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-119621 [...] eating out, groceries, entertainment, etc. A good method I’ve read about is called the “envelope method“. The method I’ve described above essentially creates a virtual [...] [...] eating out, groceries, entertainment, etc. A good method I’ve read about is called the “envelope method“. The method I’ve described above essentially creates a virtual [...]

]]> By: Amber http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-87010 Amber Tue, 20 Jan 2009 02:34:45 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-87010 I do this, in a way. Each paycheck I have an amount that will cover all of my bills (including rent) direct deposited into one account, and the remainder deposited into another. The second account is where I pay for gas, groceries, fun money, etc. I actually keep track of my spending at Neo Budget so I know how much is available in each category. (I save all receipts and reconcile my account daily because I need to keep myself accountable). I do this, in a way. Each paycheck I have an amount that will cover all of my bills (including rent) direct deposited into one account, and the remainder deposited into another. The second account is where I pay for gas, groceries, fun money, etc. I actually keep track of my spending at Neo Budget so I know how much is available in each category. (I save all receipts and reconcile my account daily because I need to keep myself accountable).

]]> By: JiminDC http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-83940 JiminDC Sat, 13 Dec 2008 14:04:38 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-83940 I use a similar method, but I prefer to pay with my check card so that my money can sit in my Wells Fargo checking account and earn some interest. Instead of putting cash in envelopes, I write the budget category amounts on 3 X 5 cards. Whenever I incur an expense, I deduct it from the amount on the appropriate card. When the balance reaches zero on a card, that is it for the month. I use a similar method, but I prefer to pay with my check card so that my money can sit in my Wells Fargo checking account and earn some interest. Instead of putting cash in envelopes, I write the budget category amounts on 3 X 5 cards. Whenever I incur an expense, I deduct it from the amount on the appropriate card. When the balance reaches zero on a card, that is it for the month.

]]> By: nathanr|ca » How To Use a Separate Debit Card to Control Spending http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-63533 nathanr|ca » How To Use a Separate Debit Card to Control Spending Fri, 06 Jun 2008 08:49:15 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-63533 [...] at I Will Teach You To Be Rich shares a system his friend uses to set a firm amount of discretionary spending each month and then [...] [...] at I Will Teach You To Be Rich shares a system his friend uses to set a firm amount of discretionary spending each month and then [...]

]]> By: Financial Education | Educated Nation | Higher Education Blog http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-63502 Financial Education | Educated Nation | Higher Education Blog Fri, 06 Jun 2008 00:01:38 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-63502 [...] He’s also got great information on simple stuff college students can use, like how to use a separate debit card for an enveloping system, or more complicated topics like personal entrepreneurship or [...] [...] He’s also got great information on simple stuff college students can use, like how to use a separate debit card for an enveloping system, or more complicated topics like personal entrepreneurship or [...]

]]> By: Bill http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-62292 Bill Wed, 21 May 2008 00:28:11 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-62292 I recently adopted this system after being completely screwed by wells fargo for $300 in overdraft fees. They couldn't make an arrangement to prevent these fees in the future, so I found a bank that could. It took all day, I went to every bank in town, but finally found one who could waive overdraft "protection", so that if the money wasn't in the bank, the point-of-sale transaction simply will not process. It's a great idea, I'll let you know how it works out. Another budgeting practice I advocate is the One-Way-Valve savings account: it's a basic short-term savings account, but the only way to take cash out of it is in person, during business hours, at the branch. No checks, no card, no online transfers. I came up with the idea a while ago, when I was a raging alcoholic, as a way to avoid spending rent money when I was falling-over drunk on the weekends. I had to walk all the way to the bank, during business hours, sober before I could get my hands on the money. The money was automatically transferred every payday, so I hardly noticed how much money I was saving and learned to spend within my means the hard way. I recommend this as well as the above plan to anyone who is terminally irresponsible. I recently adopted this system after being completely screwed by wells fargo for $300 in overdraft fees. They couldn’t make an arrangement to prevent these fees in the future, so I found a bank that could. It took all day, I went to every bank in town, but finally found one who could waive overdraft “protection”, so that if the money wasn’t in the bank, the point-of-sale transaction simply will not process. It’s a great idea, I’ll let you know how it works out.
Another budgeting practice I advocate is the One-Way-Valve savings account: it’s a basic short-term savings account, but the only way to take cash out of it is in person, during business hours, at the branch. No checks, no card, no online transfers. I came up with the idea a while ago, when I was a raging alcoholic, as a way to avoid spending rent money when I was falling-over drunk on the weekends. I had to walk all the way to the bank, during business hours, sober before I could get my hands on the money. The money was automatically transferred every payday, so I hardly noticed how much money I was saving and learned to spend within my means the hard way. I recommend this as well as the above plan to anyone who is terminally irresponsible.

]]> By: sandra http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-61640 sandra Mon, 12 May 2008 17:27:17 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-61640 My husband and I do this same thing with cash. but we take it a step further. We each get 60 dollars every 2 weeks in cash as an allowance. This is money we can use for whatever we want without feeling guilty and believe me that is important to us. Like the debit card friend, when our cash is done it is done. Our spin on the envelopes system is that at the end of every two week period I take the cash that my husband and I each have left over and deposit it in our savings account. Sometimes it is two dollars and sometimes it is twenty two. You'd be surprised how quickly that money can add up. We already deposit a regular amount into our savings but little bonuses like this help us climb towards our savings goals that much faster. I also have learned to only carry one twenty at a time in my purse. I stash the rest of my allowance somewhere at home and take it out as needed. This way I am not tempted to spend it on things I don't really want. I have to think about my purchases because it involves going home to get the cash and coming all the way back to the store. Most of the time I don't want anything that bad. My husband and I do this same thing with cash. but we take it a step further. We each get 60 dollars every 2 weeks in cash as an allowance. This is money we can use for whatever we want without feeling guilty and believe me that is important to us. Like the debit card friend, when our cash is done it is done.
Our spin on the envelopes system is that at the end of every two week period I take the cash that my husband and I each have left over and deposit it in our savings account. Sometimes it is two dollars and sometimes it is twenty two. You’d be surprised how quickly that money can add up. We already deposit a regular amount into our savings but little bonuses like this help us climb towards our savings goals that much faster.
I also have learned to only carry one twenty at a time in my purse. I stash the rest of my allowance somewhere at home and take it out as needed. This way I am not tempted to spend it on things I don’t really want. I have to think about my purchases because it involves going home to get the cash and coming all the way back to the store. Most of the time I don’t want anything that bad.

]]> By: skadoo323 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-60502 skadoo323 Fri, 02 May 2008 02:42:44 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-60502 A system of enveloping I have heard of being used is when people open ac account with an online bank of their choice and then they open multiple savings accounts. Each saving account represents the envelope in this case. For example, one account for your mortgage, another for car insurance, another far a particular credit card, etc. This system works well if one has their paycheck or such being direct deposited into the bank's checking account. Then you just transfer the funds to these envelope accounts and you instantly know what money is left to be saved or can be spent. In a sense keeping you in check on your budget. Plus you will be earning interest on the several bank accounts, which is a nice thing. Some online banks allow a limited number of accounts, but others such as ING Direct, ETrade, Provident Direct, etc will allow multiple savings account allowing one to create a virtualized envelope system. A system of enveloping I have heard of being used is when people open ac account with an online bank of their choice and then they open multiple savings accounts. Each saving account represents the envelope in this case. For example, one account for your mortgage, another for car insurance, another far a particular credit card, etc. This system works well if one has their paycheck or such being direct deposited into the bank’s checking account. Then you just transfer the funds to these envelope accounts and you instantly know what money is left to be saved or can be spent. In a sense keeping you in check on your budget. Plus you will be earning interest on the several bank accounts, which is a nice thing. Some online banks allow a limited number of accounts, but others such as ING Direct, ETrade, Provident Direct, etc will allow multiple savings account allowing one to create a virtualized envelope system.

]]> By: p shorr http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-60132 p shorr Sun, 27 Apr 2008 19:54:58 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-60132 I am interested in talking to someone off line who has created one of these debit card envelop accounts. I am a TV producer, and would like to learn more about it, and potentially to shoot a story about it. I would be happy to take comments offline, if that is allowd. I am interested in talking to someone off line who has created one of these debit card envelop accounts. I am a TV producer, and would like to learn more about it, and potentially to shoot a story about it. I would be happy to take comments offline, if that is allowd.

]]> By: DavidS http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending/comment-page-1/#comment-58383 DavidS Wed, 09 Apr 2008 13:14:11 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-use-a-separate-debit-card-for-discretionary-spending#comment-58383 I have a credit score of about 800 and won't exactly have a problem shopping for a new credit card if desired. If banks want to compete for my business, there's one feature they could easily add: Categorization and Email alerts. I want the ability to set up a budget inside their website and for purchases to be automatically "deduced" from these budget categories every time I swipe the card. At the end of each day, I want an email from them telling me how much I spent in various categories and how much is "left" for the month. If the amount I have left in any category is low when I make a purchase (such as at a gas station or restaurant), I want an immediate text message sent to my phone telling me. No overdraft fees, I can still enjoy the 1% cash-back bonus of a CREDIT card and I can enjoy the ability to actually track budgetary expenses. Will a credit card company (bank) ever do this? Imply some limit even if requested and categorized? Maybe they don't because that will make you limit your spending with them. But, CHASE (my bank), this is what I want. Make it happen. I have a credit score of about 800 and won’t exactly have a problem shopping for a new credit card if desired. If banks want to compete for my business, there’s one feature they could easily add:

Categorization and Email alerts.

I want the ability to set up a budget inside their website and for purchases to be automatically “deduced” from these budget categories every time I swipe the card. At the end of each day, I want an email from them telling me how much I spent in various categories and how much is “left” for the month. If the amount I have left in any category is low when I make a purchase (such as at a gas station or restaurant), I want an immediate text message sent to my phone telling me.

No overdraft fees, I can still enjoy the 1% cash-back bonus of a CREDIT card and I can enjoy the ability to actually track budgetary expenses.

Will a credit card company (bank) ever do this? Imply some limit even if requested and categorized? Maybe they don’t because that will make you limit your spending with them. But, CHASE (my bank), this is what I want. Make it happen.

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