Top Reasons Prepaid Cards Help in Budgeting Your Finances
Budgeting is one of the most difficult tasks most of us face today. We may be working, running a business, or receiving an allowance from our parents, but if there’s one problem that we all share, that’s how to allocate funds to address our needs and wants.
Budgeting has become a challenge for many of us due to many reasons. These include the rising cost of living expenses, wants outweighing the needs, and as well as emergencies. However, this isn’t an excuse for us to always feel like we are short of funds all the time.
Prepaid cards are thus created to help us budget our finances. Using the best prepaid cards allows us to stretch our funds and be creative in our spending habits so that we can survive until our next paycheck.
Among the top reasons prepaid cards help us include:
- You can put just the right amount of funds to spend on specific needs.
It can be challenging to manage your finances if you receive money in hard cash. If you happen to be receiving your payment using the old school brown envelope or are receiving an allowance from your parents directly, holding cold cash tempts you to splurge right away.
However, by using prepaid cards, you can set aside funds for different types of expenditure. You can use one prepaid card for meals, another for transport, and another for savings while keeping just enough notes and coins for unplanned expenses. This way, you are made aware that this is only how much you can spend on each type of necessity.
- You are not tempted to spend on impulse.
One of the downsides of using a debit card or a credit card is that you still feel secure even when you are out of real money, i.e., cash. You can still shop and purchase things by simply swiping your card over the counter. After all, you can use funds from your bank account in case you max out your limits.
However, you cannot do the same thing with a prepaid card. When your card runs out of funds, it means you’ve run out of money. You then become more aware of your shopping habits and would think twice before going on an unplanned shopping spree.
- You save on penalties and other charges.
This applies more to credit card holders, as they incur penalties and other charges when they do not make their credit card payments on time. Using a prepaid card then does you wonders, as you are not liable to such penalties and other bank-related dues. All you have to do is load your card with a certain amount of money then spend it accordingly without being subject to extra fees such as interest.
In essence, prepaid cards are like cash, but you have better control in spending your funds. You may want to start using such cards to improve your finances. Also, the best prepaid cards come with additional perks that you may find handy. Some of their top features include doing international spending, online shopping, and theft protection.