Using Your Debit Card to Stick to a Budget

Have you ever tried to quit overspending and follow a budget but just couldn’t seem to stick to it? You’re not alone. To stay within a monthly budget, some people opt to shop only using cash. But that method has limits—especially when it comes to shopping online or using app-based services. Those who choose to use credit cards to manage their personal finances face different challenges, especially when it comes to going over budget. Since credit cards are easy to use and credit card bills aren't due right away, it can be hard to stay on track. The good news is, there’s another payment type that combines the benefits of both these approaches: using the debit card linked to your bank account.

Tap Into the Benefits of Your Debit Card

Using your debit card as your go-to payment method is an effective way to stick to a budget. The Navy Federal Debit Card comes with money management tools that can help you keep your spending habits on track. Here are some ideas on how your debit card can help you stay within your budget.

Enjoy Convenience Without Debt

Using a debit card may make it easier to stick to a budget since you can see the effect on your checking account pretty quickly. The amount of money is deducted from your checking account up-front—unlike using a credit card, where you borrow money you have to repay.

Also, because you’re not adding credit card debt, you don’t have to worry about things like interest rates and minimum payments. (But note: Using a debit card won’t help you build credit or improve your credit score.)

Stay on Top of Things With Digital Banking

You still need to be careful with a debit card to avoid overdraft fees, but with the power of digital banking, you can track your spending and manage your accounts easily—and at any time. For example, before making a purchase, you can quickly see how much you have in your account using your financial institution’s mobile app* or online banking. Knowing that can help you decide whether it’s something you can afford to buy right now or if it can wait.

Set Up Notifications to Track Spending and Monitor Your Account

If you’re a Navy Federal member, you can also set spending limits and set up notifications to alert you:

• if you go over your set spending limit
• when your balance is low
• when a deposit posts

Build Your Savings

Saving money for a rainy day in an emergency fund is an important part of all budgets. Make it easier to save money for unexpected expenses by using the “pay yourself first” method. Just schedule an automatic transfer to move money from the account linked to your debit card to your savings account at the end of the month or each time you get paid. By moving money to a savings account, you may be less likely to spend it. And, you’ll have the comfort of knowing it’s there if you need it, making it less likely you’ll need to take out an expensive cash advance or payday loan. Best of all, the money in your savings account could earn dividends, so you can end up with more than you deposited.