When it comes to managing money, savings hacks are only part of the equation. Sure, smart savings strategies are essential. But equally important are smart spending strategies: No matter how carefully you’re watching your budget, you’ve still gotta eat, pay rent, and (hopefully) have enough left over for the occasional happy hour. According to a recent study by GoBankingRates, millennials spend an average of $208.77 a day in purchases across categories. So how do you make sure that cash goes as far as possible? One strategy is choosing a debit card that helps you do the work of budgeting, while giving you cash back on everyday purchases.
“We hear so much about credit card hacking, and that can be great for some people,” says Tonya Rapley, millennial money expert and creator of My Fab Finance. “But credit cards can leave people vulnerable to overspending. And if you’re carrying even a small balance from month to month, high interest rates likely outweigh the value of any credit card rewards.” A debit card can provide real-time cash flow tracking and the security that comes with knowing exactly where your money is going. Here are all the most brilliant ways to capitalize on your everyday debit card swipes.
Pick a debit card that suits your lifestyle.
Fees — an ATM charge here, an account rate there — can eat into your budget like nothing else. Make sure you choose a card that minimizes those fees and even rewards your spending habits. “People think credit cards are the only cards that offer rewards, but debit cards offer rewards as well, and these cards are actually incentivizing behavior that rewards the consumer,” says Rapley. For example: Green Dot ‘s Unlimited Cash Back Bank Account offers 3% cash back on online and app purchases (with a few exclusions). That’s tons of free money, just for using your debit card for groceries, makeup, skin-care products — all the things you’d normally shop for online, bonuses aside.
Illustrated by Lily Fulop
Autopay is your friend.
Autopay can be key, especially when you’ve got ongoing bills. Putting certain bills — including credit cards — on autopay ensures that you’ll never have to pay a late fee. It will also keep you in check when it comes to understanding exactly how much expendable money is left in your account after your essential expenses. Of course, when you’re adding bills to autopay, it’s important to understand your cash flow, says Rapley. “Autopay can be great if you know the exact amount of your paycheck and when it will hit your account,” says Rapley. But if you’re a member of the gig economy, or cobble together a few different part-time jobs, it may be smart to only autopay a few essential bills and then make sure to pay the larger bills — like your rent — when you know the money hits your account.
Illustrated by Lily Fulop
Use apps and programs to help you track your spending.
“The best spending tracking tool is the one that works for you,” says Shannah Compton Game, a certified financial planner and host of the Millennial Money podcast. For some people, that can be as simple as a sticky note keeping a running tally of how much money they’ve spent. Most of us are likely to lose that sticky note within the first 24 hours — and that’s where online tools come in. There are plenty of sophisticated budgeting and spending programs online — try a few (give them each at least a week), and choose the one that actually makes you excited to open it. That’s because ideally, it’s a smart idea to look at your account and your spending at least once a day, so you know exactly how much money you have available — and can thus steer clear of letting your funds go into the negatives or catch suspicious, unusual charges ASAP. While third-party mobile apps can be great tools, your bank’s app is also a good one to download. For example, Green Dot ’s app allows you to track your spending in real time, while also keeping track of any cash-back bonuses accrued.
Illustrated by Lily Fulop
Always have cash on hand.
It’s smart to get in the habit of regularly having actual cash in hand. Not only can it make paying for your share of a restaurant meal super simple (nothing like throwing down a $20 while everyone else tells the waiter exactly how much to put on their card), but cash is the simplest way to DIY a budget. Consider taking out a certain amount of cash each week and placing it in a separate section of your wallet. Earmark the money — whether it’s $20 or $100 — as your fun money for the week and use it for happy hours or spontaneous treats like mani/pedis and iced coffees. Roll over any unused cash for next week. That way, you can decide whether to save the cash and splurge on one pricy plan or have small treats throughout the month.
How much should you budget for your fun money? That depends on a range of factors, including how many bills you have, but a good rule of thumb is 10% or less of your take-home pay. Take home about $3,000 a month after taxes? Then $300 is the max per month you’ve got to spend on extras like dinners out, says Rapley. Maximize that cash by avoiding ATM fees — use a cash-back option when you pay for something with your debit card.
Illustrated by Lily Fulop
Read the fine print on your debit card.
Before you use your card, you have to understand the logistics of your account — including what to do if you need help. For example, it’s a smart idea to program the customer service line for your bank in your phone now, so you can call ASAP if your card has been lost or stolen without digging around for the number. It’s also important to understand any fee structure, especially since some fees may not be immediately obvious. For example, does your card charge a fee if your account balance falls below a certain amount? Will your card be declined if there aren’t enough funds in your account? What about foreign transaction fees? Choosing a card with minimal fees ensures your money is yours — not the bank’s. After all, you work hard for your money. Let your debit card do some of the heavy lifting for you.
Illustrated by Lily Fulop
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