Originally posted on https://cyberparent.com/money/use-digital-enveloping-to-budget-household-expenses/
Saving money is difficult for everyone. One of the best ways to save, avoid spending too much, and put away money for a specific reason is to use prepaid cards. Prepaid debit cards loaded with cash beforehand have become a popular way to budget, spend money abroad, and prevent overdraft, overspending, and financial mistakes.
There are many methods for using these cards, but the most effective way to save money is to use yours as a “digital envelope.” This means that you sequester money with the card and either avoid using it all or only use it for daily, weekly, or monthly expenses.
Budget From Paycheck to Paycheck
It doesn’t matter who you are or how much you make, people struggle to budget effectively from paycheck to paycheck, week to week, and month to month. An extremely popular way to budget for life in general is to use prepaid cards that either have only the amount of money you can spend during a specific time period or use it to put away money for a specific event or expense.
It’s quite simple. Open up a card, register, and pay the fee to get it started and begin saving. The experts at the site MoneyPug, a popular platform to find UK prepaid cards, say that you don’t have to spend a lot on a card. There are often cheap or free ones you can find if you do your homework. When you’re struggling to manage money or simply need to save for a particular thing, prepaid cards can help you get by in daily life.
Control Children’s Spending
For the parents who have kids that are growing up, you may need a way to give them money. You probably want to trust them while wanting to teach them financial responsibility. Prepaid cards a great way to do this.
By loading their allowance and other money they may need onto a prepaid debit card, you will allow your kids to engage with day-to-day spending. This helps them learn how to save by teaching them the hard way. They will probably spend too much of their money and will be forced to wait for their next allowance. Prepaid cards are also a great way to ensure that your kids don’t spend too much or overdraft.
Saving for Holidays, Vacations, & Other Expenses
Budgeting isn’t just difficult for daily life, it can be quite challenging for the things we all want and have trouble affording. For one, it can be used as an effective way to save for a vacation. There are a few ways to do this, but the most popular option is to put money onto a prepaid card and use it when you go abroad. You can allocate money you want to save for a trip and take it with you, providing a convenient way to take out cash, as well as spend at restaurants, bars, and hotels while conversion avoiding fees.
You can also use prepaid cards for birthdays, holidays, and other important events like weddings. Life happens and sometimes you need money when you don’t have it. You can save quickly by using the card as an envelope you can’t touch. Whether you need money for a religious holiday like Christmas or need to save for your child’s wedding, prepaid cards can get the job done. Whatever expense you’re looking to finance, you can do it with a prepaid card.
Choosing a Prepaid Card
These aren’t the things you can save for with a prepaid card, but whether you’re budgeting daily life or your dream trip it is important to be prudent about the card you choose. By knowing the pros and cons, you can use it effectively.
Prepaid cards are easy and convenient to use, but it is likely that you will spend more than using cash. There are daily spending limits for certain cards, and potential fees you might encounter. It is key to read the fine print, understand what you are getting into, and use the card in the most beneficial way for your situation. Be diligent and it won’t be a problem—you will be on your way to financial stability and proper saving in no time.