by Jennifer Boutwell, Vice President of Marketing, InComm
The holidays are over and the extra December spending has piled onto the regular January bills. Indeed it’s no surprise that at this time of the year, people are more focused than ever on better budgeting their money and staying true to smarter financial spending. Everyone is familiar with the usual cycle of deciding to stick to a budget, only to see their best intentions fall away as the pressures of everyday life take hold.
But fear not! To combat this vicious circle and start better controlling day-to-day expenses, this post will take a look at a critical tool that people are aware of, but probably haven’t been properly utilizing – prepaid cards.
Often times people struggle to properly stick to a set weekly budget (e.g.$200 per week), especially when it’s so easy to walk into a store with the intent of only spending $40 and end up leaving with $90 worth of unnecessary items. Another core challenge people often face is being unaware as to how much they’ve actually spent over the course of a week. This lack of basic information about how much they’re spending can lead to their budgeting goals going out the window due to runaway spending.
Enter the prepaid card. Prepaid cards provide users with an outstanding tool for both controlling how much they spend when they walk into the store, and monitoring how much they’ve spent over the course of a given week.
Let’s take a look at the above situation, only this time with a prepaid card being used. As one walks around the store, they may see $90 worth of stuff that they WANT. However, they only have $40 on the card, so they have to prioritize and only purchase exactly what they NEED.
As the week goes on, this continued check on spending helps reduce the budget-killing “impulse spending” that everyone is tempted with every time they enter the store. By only having a set amount on a prepaid card, they are forced to prioritize not only during that one trip to the store, but throughout the entire week.
Equally as important, once they’ve spent all the money on the card, they need to reload it with more money before they can use it again. This gives them a specific record throughout the week of exactly how much they’ve put on the card, enabling them to see where they stand in relation to their weekly total, and empowering them to better plan their spending for the rest of the remaining days.
Great; but how does one build a weekly budget incorporating prepaid cards?
Building a weekly budget may sound intimidating to those who’ve never used one, but fortunately they’re actually simple to create. Here are some easy tips to help build a weekly budget:
- Over the course of a two-week period, carry around a little notebook and make a quick entry every time a purchase is made. This can be lunch, groceries, gasoline, going the movies, etc.
- At the end of each week, add up the total and group them into three main categories: food, gasoline and personal expenses.
- Review the figures from both weeks in order to get a general idea of how much was spent in each of the three above categories, as well as how much was overspent by buying more than was needed.
- From that review, decide on the weekly amount for the budget.
- Go to any major retailer, get a prepaid card from a reliable distributor like InComm, and put $50 on it.
- Start using the prepaid card for your weekly expenses and then reload it with another $50 once it’s out of money. Why $50 at a time? This is done to prevent the “impulse spending” discussed earlier and helps one stick to their overall weekly budget goal.
Using prepaid cards not only eliminates ruining weekly budgets through impulse spending, but they also provide users with the ability to track exactly how much they’ve put on the card as the week goes on.
Despite the ongoing economic slowdown, by incorporating the budgeting tactics laid out above, anyone can get their spending under control and better budget their expenses in 2011!
Jennifer Boutwell is Vice President of Marketing for InComm.com, a leading marketer and distributor and technology innovator of prepaid products.
