‘The way to Hell is paved with good intentions’. Ah, that old chestnut. One of best intentions we all seem to have it to budget efficiently, but although we know it’s a good idea, can be a lot different in practice.
Now, we aren’t going to be condemned to damnation for failing to keep on top or finances, but when they do get out of control, it can feel like hell trying to manage it all.
However, help is at hand and you’ll be praising the Heavens that you discovered the prepaid debit card once you have your budget all ship-shape.
What is a Prepaid Debit Card and Why is it Good for Budgeting?
A prepaid debit card is one which you load money onto and spend at a range of different merchants, either in-store or online. You can also use it to pay bills by setting up recurring payments or by making one-off payments over the phone or online.
You can only spend the money you have loaded onto your prepaid debit card, meaning when the balance runs out you can no longer making any payments until you top it up again. This means it is an excellent way to budget because you can’t borrow with it like a credit card, you can only spend the money you have on it.
What is the Best way to Budget with a Prepaid Debit Card?
There are many ways to maximise the benefits of a prepaid debit card and use it to budget effectively, starting with how get your hands on the card in the first place.
Consider the Card Fees
Although they are much more efficient than credit cards, or even debit cards linked directly to a current account with an overdraft facility, prepaid cards can come with fees. Some operators may charge a nominal fee to take out the prepaid card in the first place and also may charge a monthly fee for using it. Make sure you read up on all the fees involved with prepaid cards before choosing which one to go for.
Find out How and Where you can Reload your Prepaid Card
Being able to reload is conveniently vital because you are more likely to use the prepaid card if it is easy to reload. Do your homework and find out the reloading facilities available for each card. Many cards can be reloaded with cash at specified merchants, over the phone with your bank, or online through your bank or other payment websites such as PayPal.
Cover the Essentials First
Once you have loaded the money onto your card, use it to pay for the essentials such as groceries and any household bills you intend paying with it. If you have money left, you can then put it towards next month’s expenses and therefore won’t have to load as much on the next time around.
Use the Card for Saving
Although they can be used for day-to-day expenses, many people use a prepaid debit card as a form of saving towards larger expenses. You can load on a little at a time and when you have saved enough, use it for something like a car, home improvements or a holiday or to cover expenses like Christmas or birthdays.