Yesterday I wrote an article on prepaid debit cards, I wanted to highlight one of the best features of using a prepaid debit card, sticking to your budget!
I really like prepaid debit cards, because they’re “prepaid.” What that means is that you can auto-load your card each month with a set amount, and then you have to stick to that amount. There’s no cheating, because unlike a bank’s debit card, you can’t spend more than you actually have. The other benefit is you avoid ridiculous overdraft fees and you know exactly what your monthly fees will be.
Tips for Using A Prepaid Debit Card for Budgeting
In my budget I have categories and money for some categories has traditionally been put into my savings account. The problem is that this money often gets used for other things or it isn’t quickly available when I need it. This means that when the time comes to use the money for purchases in that category, it isn’t there and I end up blowing my budget.
With Christmas coming up, I am always looking for ways to stay in budget and a prepaid credit card that I could not only shop online with but also take with me so that when I see that perfect gift, I would have the means to purchase it.
Another budget category that I might use a prepaid card for is clothing purchases. I am definitely not a ‘clothes horse’ so my clothing purchases tend to be sporadic. If I put my clothing budget into my savings account, I either use it for something else or don’t have the funds immediately available when I see something that I really like.
Because we travel in our business, it is often inconvenient to use cash. I often have to make reservations at a hotel and without some kind of credit/debit card, it is almost impossible. I can put our budgeted amount onto our debit card and then make reservations with confidence. It’s also a true pain in the rear to have to prepay for gas. I have to estimate what it is going to cost to fill the tank, stand in line to pay the deposit and then stand in line again when I am done filling the tank. The prepaid card will make trips much easier.
You can also extend this to your family. For example, a prepaid debit card is perfect for a college student. Instead of giving them a credit card or cash for the entire semester, consider giving them a prepaid debit card that gets auto-loaded each month. That will force them to stay within their budget, and will also keep them from blowing through their money before the semester is over.
In short, prepaid cards are a tool that can be used to enhance your budget while forcing you to stay in a budget. You need to shop wisely for your card and be aware of any hidden charges and fees. As I have said before, I will never own another credit card so a prepaid card is very attractive to me.
I have to confess that not having a credit card is a MAJOR inconvenience. There are times when it is almost impossible to purchase something without it especially since I do so much business online. When I order bulk supplies, it is much less expensive to purchase online and many merchants do not accept Paypal. Over the last week, I have been researching prepaid credit cards.
My Dream Card
I have made up the following wish list for my dream card. I don’t expect to get it free but I would like it to be reasonable:
- Reasonable activation fee of under $20
- No dormancy fees
- Pay some kind of interest on my money
- No fees for purchases
- Reasonable fees for atm withdrawals ($1 or less)
- Free Online Balance Check
- No monthly fees
Is this asking too much? There are a few cards that come close but none meet all of my requirements so I have been making comparisons. They are very confusing and the card that might be the best for my spending habits (occasional transactions) might not be best for everyone. If you plan on using the card several times per month, you might be better off choosing one that has a small monthly fee and free transactions.
Because Walmart has put their money card on sale I thought I would use it as an example. I honestly was somewhat skeptical about the monthly fees but after much research I have found that they are probably the best value. All transactions are free except atm transactions. The only way that I have found to get around atm transaction fees is to use your bank card at your own bank and that is not always free.
This is what is posted on Walmart’s cardholder agreement:
| Standard Fees |
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| One-time Temporary Card Issuance Fee at Walmart Store | |
| - Standard Walmart MoneyCard | $3.00 |
| - Student Edition Walmart MoneyCard | $6.00 |
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| Reload Personalized Card at Walmart (No Check Cashing) | $3.00 |
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| Reload Personalized Card at Walmart (Check Cashing) | $0.00 |
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| Reload Personalized Card at Green Dot | Varies by Retailer |
| Location (other than Walmart store) | |
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| Additional Personalized Card Fee | |
| - Standard Walmart MoneyCard | $3.00 |
| - Student Edition Walmart MoneyCard | $0.00 |
| Standard Fees |
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| - ATM Cash Transaction – Domestic | $2.00 |
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| ATM Cash Transaction – International | $2.00 |
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| ATM Balance Inquiry | $1.00 |
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| POS Cash Back | $0.00 |
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| Walmart POS Balance Inquiry | $0.00 |
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| IVR (Automatic Telephone System) Balance Inquiry | $0.00 |
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| Monthly Maintenance Fee | $3.00 |
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| Operator Assisted Call | $0.00 |
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| Teller Cash Transaction | $2.00 |
| Standard Fees |
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| Lost/Stolen Replacement Personalized Card | $3.00 |
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| PIN Debit Purchase | $0.00 |
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| Signature Debit Purchase | $0.00 |
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| Stop Payment Order Fee (see section 7) | $0.00 |
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| Negative Balance Fee | $0.00 |
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| Rush Delivery of Personalized Card | $20.00 |
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| Foreign Transactions (see section 19) | 2% |
In contrast, here are some of the fees from another highly advertised prepaid credit card:
This is the NetSpend Prepaid Card as shown on another website:
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Altogether though these fees may be considerably less than you are spending on your current credit card every month. These fees are subject to change so if you are considering a prepaid credit card make sure that you read the small print and search for the best deal.
If you have any better deals on prepaid cards, I’d love to hear from you. I am specifically searching for one that pays interest on the available balance.
Plans for our big family Thanksgiving dinner are well under way. As my daughter tells everyone, Thanksgiving is Mom’s holiday to cook and she is right. There is nothing I enjoy more than cooking turkey, stuffing and all the fixings. Of course, I enjoy the left over turkey just as much. I could eat turkey sandwiches every single day.
I bought the turkey well over a month ago when they were on sale. We have four different families who come to dinner for Thanksgiving and each person brings their favorite dish. It makes for a varied menu and means that all of the cooking and preparation doesn’t fall on Randy and I.
With Thanksgiving being so close, I have been thinking about Christmas presents. There are a few that I have bought throughout the year, just because it was something that I knew someone would enjoy. It takes some of the pressure off at the holiday season. I have always envied people who start Christmas shopping in January. I am not organized enough to do that. I also can’t stand having something here for someone for so long. Once I buy it for them, I want to give it to them.
We have quite a few bachelor friends and close friends who we like to give something. I usually start baking cookies and breads right after Thanksgiving. Each one of our friends gets a box of cookies & breads for Christmas. Those who entertain during the holidays have some extra cookies to give away and our single friends really appreciate them.
I am also going to be giving some of the pickles and relish that I have made over the summer. I doubt that we can eat 20 pints of green tomato relish before next fall. It will be a nice and inexpensive way to let our friends know that we are thinking of them.
I still need to find some frugal ideas for some of the family and the children. What do you do for your family and friends at Christmas? Do you have any frugal ideas for children’s presents? Leave a comment and I will be using reader’s feedback for an upcoming post.
This is a guest post by Debbie Dragon who is a freelance writer providing articles for Billeater.com, a site that helps it’s readers compare insurance and discover tricks for saving money. She is also a single mother of two young boys and is currently working on eliminating her own credit card debt.
Credit card debt is unfortunately a way of life for the average American family. We’re enticed daily with the backwards motto to “buy today, pay eventually”. Many struggle to simply make the minimum monthly payment. For the many moms who are the family bill-payers, here’s some effective and easy ways you can eliminate credit card debt.
First and foremost, pay for your purchases in cash. You can prepare for this in advance, once you are determined to eliminate your debt, by setting aside at least $20 a week or more if possible, to start a petty cash fund. Commit to using your credit cards only in an emergency or a situation that requires a credit card, such as renting a car.
Review charges you consistently make on a monthly basis. These charges may include membership fees, subscriptions, automatic bill payments, gas for your car, prescriptions, sports equipment and uniforms, school tuition or orthodontist appointments. After listing them, determine how much money is to be allocated monthly for each payment. You may need to cancel the non-essentials. You can exercise at home for free; and if you don’t read half of the magazines you’re subscribed to then cancel them. Eliminating gym fees and subscriptions alone could save you hundreds of dollars per month.
One common sense method for moms to eliminate credit card debt is known as the Debt Reduction Pyramid. Basically, it’s a process of determining all debts owed starting with your smallest debt, and then pay off each one fully, working your way down to the largest debt. Predetermine to pay above the minimum payment for credit card debts. Once some of the smaller debts are paid, begin to pay full monthly payments. Continue this process until you successfully pay off all your debts in full.
Moms, a budget may sound too simple and over-rated but it can be the single most important tool for eliminating credit card debt. By creating a personalized budget and strictly adhering to it on a daily basis, you will reap the benefits and see your debt dwindle before your eyes. Remember to place your non-essential expenses at the bottom of the budget’s priority list.
Just by following these simple steps, you are well on your way to eliminating credit card debt. Reconsider those club memberships and pointless magazine subscriptions in order to organize expenses in priority-categories. With a debt as small as $10,000, if you’re only able to make minimum monthly payments it will take you 40 years to pay off that debt.
Tags: debt, debt reduction
I don’t have any credit cards currently but it never ceases to amaze me what people will pay to have one. Congress recently passed a bill that limits the banks from raising interest rates on existing balances. In reaction to this limit, banks are now starting to charge annual fees.
According to an article in USA, Today,
Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.
These fees are the credit card industry’s response to credit card legislation that will, among other things, restrict credit card issuers’ ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.
Other companies are just increasing or adding an annual fee for all credit cards. USA Today, suggests that you make a decision on whether to keep your card or not by deciding how much you are going to use it and whether you can find a better deal elsewhere. They suggest finding a credit union as they generally have lower rates and charges for their members.
Has your interest rate or annual fee changed on your credit cards in anticipation of the new legislation?
When I was growing up, we supplemented our heat with a wood stove. It was smelly, smoky and a very dry heat. I have fond memories of cozening up to the woodstove after coming in from the cold. I have not so fond memories of filling the house with smoke trying to get it started and coming home to an icy house because it had gone out while we were gone. Now we have a wood furnace. It is a very different kind of heat.
Benefits of Wood Furnace
- Free Heat – We cut downed trees up to use for firewood during the winter. It doesn’t cost us anything but time and work. Generally it takes us a day to get a truckload of wood and that includes splitting and stacking.
- Free Hot Water – Our wood furnace uses hot water to heat the house. The hot water goes through a coil and heats the air in the house. We also use the furnace to heat our hot water during the winter.
- Moist Heat - Rather than having gas or electric burner heating the air in the house, it is heated by hot water. It does not dry out the air and cause sinus and dry skin.
- Burns Efficiently – The wood furnace has a draft fan on it that cuts on when the water temperature drops. This blows air over the wood and the fire heats up. When the water temperature reaches 200 degrees, the draft fan cuts off. At most during the coldest weather, we have to fill the furnace twice a day.
- Lower Electric Bills – Because we use the wood furnace for both heat and hot water, our electric bill drops significantly during the winter. I don’t believe we had one that was over $50 last winter. This saves us hundreds of dollars over the year.
- Renewable Resource – Unlike oil, coal, gas, etc. wood is a renewable source of fuel. We can plant more trees while we cannot manufacture more oil, coal, or gas.
Drawbacks of Wood Furnace
- Cost of Wood - The wood furnace suits us very well because we have an almost unlimited supply of wood but if you had to purchase wood you would have to weigh the cost of wood against the cost of oil, gas or electricity.
- Air Pollutant - While the newer wood furnaces burn efficiently and cause less pollution, they do cause some.
- Load Outside - Someone has to load the furnace twice a day. This means going out and putting wood into it even when it’s 10 degrees outside and snowing.
- Time, time, time – We do not buy wood but we do spend a few weeks a year cutting, splitting and stacking it. We don’t do it all at the same time but this week we have gotten a load every day and it has taken most of the day to do it. If you plan on cutting your own, you need to plan on spending several days per month getting wood.
Overall I love the wood furnace. I love the heat, the really hot water and I REALLY love our electric bill during the winter. I really don’t mind running out in the morning and loading the wood furnace. And loading and stacking wood is great exercise for arms and shoulders.
Tags: wood heat
You may have read how our local county and R’s ex wife think they can get Blood From A Turnip a couple of months ago. Sadly, the story continues as R’s ex has filed another show cause. She did this the week before he went into a hospital for his hip replacement. The date was set on the same day as his post surgical appointment at the joint clinic.
He wrote a letter to the court the week after surgery and asked that the date be continued as the clinic appointments are booked several months in advance. The clerk of the court was not helpful to say the least and the best we could get was that she would show it to the judge. This means that instead of rescheduling it in advance, they wait until the morning of court and R’s ex has to show up so they can set another date.
The last time they had to reschedule a date, we had an attorney. The attorney made arrangements with the clerk to reschedule it and told R not to go to court. The judge issued a warrant for his arrest for not showing up in court. The sherrif’s department notified him and he turned himself in the next day. This required us to bond him out.
We went to the clinic with no idea of whether there would be another warrant issued for his arrest when we returned home. We came home and waited for the police to show up and haul him off. We looked over our shoulder and waited on pins and needles for two days. Finally the sheriff delivered a show cause summons for October 27th. Whew.
While there is no possible way that we could pay her the $50,000 or the $1300 per month that the courts have awarded her, R is trying to pay her something every month. It’s worse than a credit card debt as the amount due just keeps growing and growing and there is no way we can even begin to whittle it down.
He will go to court on the 27th with really no hope that anything will change. The court will probably order him to pay another $5000 and give him 3 months to do it. There is no hope at all that we could pay that much. When the judge ordered it last time they put him in jail for 4 months or until the $5000 was paid. A very, very good friend loaned us the money to get him out but we certainly cannot afford to borrow any more and cannot in good conscience accept it when we can’t pay it back.
I am still wondering why the courts awarded this much in spousal support when he was out of work on disability when they were first separated. In Virginia, spousal support is not supposed to be punative. It is not meant to be a punishment, it is meant to allow the spouse to continue to live in the same basic lifestyle that they were living. How can this amount of spousal support be anything but punative when there is no hope of paying it? How many other men or women are in the same situation?
Even if R could go back to work, the economy is so bad that it would be difficult to find a job. This area is extremely depressed. Factories that have been in business for decades are closing their doors. I know of 3 major area employers who have either closed or layed of a large percentage of their employees in the last month. This is a rural area and there are very few employers here anyway.
So R’s ex has won the right to be labeled my biggest aching debt. There is no way to pay it off or even keep up with the monthly payments. It is one of the few debts that can put you in jail for not paying. It cannot be discharged by bankruptcy so it is hopeless.
I am amazed at how different it feels to get a PAYCHECK. Unless you have worked at home or been a homemaker, I don’t think that you can possibly understand the difference in how you feel when you suddenly have a set amount of money coming in at the end of the week and a place to go every day on a set schedule.
Now that I am getting adjusted to the physical part of my job, I find that I am getting just as much done at home. The only one that it has affected negatively is R. He doesn’t complain but I can tell that he is lonely and has a bit of cabin fever. Since his operation, he really can’t get out and do the things that he used to do and he also can’t drive anywhere. When I get home, he either wants to go somewhere or talk. I am ready to sit down and chill for an hour.
We are working through it. The first few days, I was exhausted when I got home. All I wanted to do was take a nap or go to bed. Now I have a bit more energy and am more willing to run into town or go to the barn and do chores.
The biggest change has been having a set amount of money coming in at the end of the week. It is different. I cashed my paycheck and put 75% of it into the emergency fund. I am going to keep adding as much as I can so that we will have something to fall back on. I believe that since we have been making it without any outside income, that I should be able to save a good portion of it.
I have also got to sit down and redo our monthly budget. Eventually, I would like to use my paycheck to pay the bills and have the farm income go into a savings account. Right now though we are ahead on the farm and so I am just prolonging dedicating my salary to bills. It feels REALLY GOOD to be growing our savings.
Tags: budget, emergency fund, paycheck
Yes, you read it right. Today is my first day back at work. This means regular income for the first time in 2 1/2 years. I can make a regular budget and know how much money I will have. It is not a high paying job but it will pay the bills and give us a little left over for the emergency fund.
I wish I could write some great posts on my job search but honestly, I didn’t even apply for this job. A friend knew it was coming open and knew that I was qualified so they called me. The employer knows me slightly and there you have it, I was employed.
In the long run it will be a good thing. Right now it just makes life a little more complicated. R is still pretty much house bound and even though he has gotten outside a few times this week, he can’t lift anything or do too much on the leg. I am going to worry about him.
I am also going to have to change his appointments at the doctor’s office to pull blood twice a week to a time when I can take him. Working around this shouldn’t be a huge big deal but something else to add into the schedule.
I am very thankful that I am going back to work in this economy though. The job market is tough and competitive especially here where even during normal times there are not many jobs.
Apparently I am not the only one who has trouble cashing checks at certain banks. I was shocked by Bank of America’s response to this man’s plight. What in the world ever happened to customer service?
Steve Valdez went to Bank of America to cash his wife’s check. For security reasons, Bank of America requires a thumbprint if you are cashing a check for someone else. No problem for most of us but Mr. Valdez was born without thumbs. I’m sure he would have given his right arm (pun intended) to be able to provide a thumbprint but the fact remained that he couldn’t. Bank of America’s response….. “Whatever”.
You can read the whole story here at Fox News. What a shame that a large corporation can treat the disabled so shabbily. I don’t think that an apology days later from a vice president is quite enough.
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