It’s human nature. Psychologists call the phenomenon the “hedonic treadmill” – the idea that, at some point, you get bored and familiar with what you have. So, splurges are one way to sneak in a boost to your pleasure sensors when you’re in need of a little pick-me-up. The trick is to manage this inevitable part of human nature so you don’t wind up in unnecessary debt. If done right, splurges aren’t just fun, they’re quite healthy for you too.

Wondering how to make it happen? Wonder no more! We’ve outlined our “Three Golden Rules” of splurge spending.

Budget for splurges

We don’t mean you need to plan exactly what you’ll splurge on as you’re building your budget each month. But it is a good idea to leave room in your expendable income for little treats. If you’re splurging within a budget, it’s less likely to get out of control.

Define “splurge”

Know the difference between a splurge and a habit. Ditching your home-brewed java one morning to grab a mocha from your favorite coffee shop? Splurge. Budgeting an extra $30 per week to afford your café coffee every day? That’s habitual spending. Understanding this distinction is important when you’re building your monthly budget. If you consider your habit as a “splurge,” you’ll not have budgeted the funds needed to cover your truly impulsive purchases.

Keep ‘em small

Be smart with your splurges. Indulgence doesn’t require extravagance. One way to keep your splurge spending in check is to make sure you use your debit card with these purchases. That way, even if you didn’t include the item in your monthly budget, you know you won’t spend more money than you have because you’re using your debit card to spend funds directly from your checking account.

Let us know how you manage your splurges each month! After all, who said a little indulgence every now and then had to be a bad thing? 

Failure to save.

We just can’t help ourselves – our biggest piece of advice is almost always to save, save, save! Setting aside a bit of money each month is one of the most important ways to keep out of financial trouble when the unexpected occurs. Choose an amount that’s reasonable for you. Even if it seems insignificant at first, you’ll probably be surprised how quickly your savings will grow.

Ignoring your account balance.

You’re familiar with the head-in-the-sand mentality? Sometimes it’s easier to ignore a problem rather than face it head on. If money troubles stress you out, the last thing you want to do is avoid checking your accounts frequently. In fact, the more in tune you are with your day-to-day spending, the more likely you are to reel in unnecessary spending.

Bouncing payments.

One of the great things about managing money using your debit card is that all purchases are debited straight from your checking account, helping you avoid racking up debt. However, if you overdraw funds from your account, you risk owing fees for your overdraft protection. That’s another great reason to track your finances regularly. If you always know how much money is in your checking account, you’re less likely to overdraw with your debit card.

Skimping on your homework.

Even as an adult, homework never really goes away when it comes to managing your finances. Before you make a purchase, make sure to check around for the cheapest price. Often, it’s easy to purchase the first item that meets your needs because it’s convenient and you don’t realize how much extra money you’re spending. Don’t believe us? Try it out for a month. Keep track of how many items you’re able to find for a cheaper price and see for yourself how much you’ll save!

Impulsive spending.

If you find yourself itching to purchase items out of convenience, try to practice being more diligent by shopping around for price breaks. Also, it’s not uncommon to buy little gifts after a bad day or even after a particularly good one. While it’s healthy to indulge every once in a while, you should track that behavior each month to help you better understand if it’s a habit that’s getting out of control.

Struggling Alone.

This might be something you’ve yet to consider. If you are struggling to get out of debt or even just manage your monthly budget, don’t try to fix things alone. There are resources available to you at relatively low cost or sometimes, for free. Contact your financial institution and talk to them about your situation. Whether you need to outline a plan to get of debt or you want advice on how to manage your monthly budget, your bank or credit union can point you in the right direction for assistance. And, of course, you can always consult us here at DebitSavvy with your debit card and money management questions!

Photo courtesy of Independent Bankers Association of Texas

DebitSavvy had a lot of fun recently! In celebration of Financial Literacy Month, we participated in the Teach the Teacher event at West Texas A&M University hosted by the Education Foundation of the Independent Bankers Association of Texas. The event was created to talk personal money management with more than 60 teachers who work with about 8,500 high school students in 20 school districts across West Texas. These teachers choose to make financial literacy a priority in their classrooms by teaching students the basics of personal money management.

When asked why they believe it’s important to teach basic finances to students, the teachers shared similar stories. Many students learn to balance their personal finances too late in life. They frequently stumble into debt. This poor financial planning often leaves a heavy impact years later when young adults try to buy their first homes or cars and their credit score is too low to gain support from their financial institutions. These teachers have committed to continue to educate themselves so they can better educate their students on the basics of personal finance.

And DebitSavvy joined the cause! We featured our new debit card quiz, which provides basic information related to using debit cards to manage finances. We also discussed a few issues related to financial autonomy that we’ve covered in our blog, including contributing to your savings each month and starting to build up your credit score early in life.

Here at DebitSavvy, we’re passionate about educating students and young adults about smart money management. Odds are, we’ve all had at least one “uh-oh” moment when it comes to our personal finances. So, we’re curious. Did you have an opportunity to participate in a basic finance class in school? If so, do you think it helped you prepare for managing your own finances? Or, if you weren’t offered personal finance classes, do you think it would have been something from which you would have benefited?

Our readers come from different walks of life. Some of you are taking your first steps into managing your personal finances while others have already dived deep into the world of financial autonomy. But one notion we can probably agree on is that personal money management is a crucial topic to understand in today’s economy. That’s why, here at DebitSavvy, we’re celebrating Financial Literacy Month. This April, we’ll be publishing blogs to introduce (or for some, review) the basic steps to establishing healthy financial habits.

Honestly, we get it. Just about anyone could fall into a hole if they’re not armed with the proper information to avoid such pitfalls. Maybe it has already happened to you. Or, maybe you’re unsure of where to begin to manage your finances out of fear you’ll make a wrong move. We want to help. Like many long-term goals, the path to stable finances begins with outlining a plan. When you’re talking about managing money, that plan should begin with saving, building a budget and avoiding frivolous debt.

Throughout the next couple of weeks, we’ll outline exactly what it means to be “financially literate,” as well as define the best first steps to take in order to put you on the path toward financial stability. And even if you’re somewhat behind the curve, we think you’ll find our tips a useful place to begin to turn things around.

We’d like to start the dialogue with you first. What’s your situation? Do you have a particular question about establishing your own financial autonomy or managing your budget? We’re here to help your financial life stay on track, so don’t hesitate to tell us where to start. Send us your questions and comments, either to this post or through the DebitSavvy Q&A.

According to the research, most PINs are 1111, 1234 or the person’s birthday.¹ It turns out that people are not only pretty bad at choosing secure PINs, they’re also likely to share that information with other people. About 50 percent of the people surveyed admitted to sharing their PIN with at least one other person.

More than 1.7 million PINs were analyzed in the study. Researchers suggested that blacklisting the top 100 PINs would reduce the chance of guessing a PIN from nearly 10 percent to just 0.2 percent. Curious what these top PINs are? We were too:

0000, 0101-0103, 0110, 0111, 0123, 0202, 0303, 0404, 0505, 0606, 0707, 0808, 0909, 1010, 1101-1103, 1110-1112, 1123, 1201-1203, 1210-1212, 1234, 1956-2015, 2222, 2229, 2580, 3333, 4444, 5252, 5683, 6666, 7465, 7667.¹ 

See your PIN listed above? Are you guilty of sharing your PIN with others? We understand. It seems unlikely that your debit card would ever be stolen, and no one wants to experience that awkward moment of forgetting a PIN at the register. Plus, there are things you can do to protect yourself in the event that your debit card is stolen. But we’re going to challenge you to avoid that headache altogether: decide on a more secure PIN and allow us to help you figure out a technique to remember the new number.

Step one – pick a number that is not easily tied to you but is easy for you to remember. Were you using your own birthday? Use your pet’s birthday instead. Did you use the last four digits of your phone number? Use the last four digits of a friend’s phone number instead. Once you’ve decided on a new PIN, we have a few ideas to help you remember it.

Try spelling out a word using the number-letter combinations shown on telephone dial pads. Let’s say your new PIN is 5263. With this number, you could spell out the word “LAND” to help you remember the numbers. Finding words might sound tricky at first, but you probably have more options than you think.

If you must write down the PIN to remember it, try encrypting it first. Sticking with the example of 5263, try adding in a meaningless number between each real number of your PIN when you write it down: 5020603. Make it more complex by choosing different numbers as the “filler” numbers: 5627683. You’ll be the only one who knows that only every other number is a piece of your PIN.

If you’re more of a math whiz, maybe it’s easier for you to remember a simple formula like +2. So, instead of writing down 5263, you’d write down 7485. Only you would know that the numbers written down are +2 from the actual PIN.

Interested in reading the full research paper? You can access it here.

Now, we want to hear from you. Do you have tricks that help you remember your PIN and keep it secure? Were you compelled to change your PIN after reading this post or the research?  We want to know!

Pushing through hours of writing papers, working part-time jobs and studying for exams.  Finally, it’s nearly here, the break you’ve been waiting for. But now that you have some time to decompress from the stress of everyday life, the last thing you want to do is worry about your money situation over spring break, right? DebitSavvy can help. Read on for a few tips to help you plan your spring break on a budget.

Decide on a budget.

The first step to a successful spring break vaca on a budget is to know exactly what that budget is. Decide how much money you feel comfortable spending, even if it’s less than you’d like. We’ll worry about staying within those parameters a little later. If you plan to use your debit card, you can avoid racking up any debt over the break. Remember, your budget will determine your spring break location, travel plans and entertainment.

Location. Location. Location.

Deciding on a location will determine how financially flexible you can be for the rest of the week. Sure, maybe you had your heart set on sunning in Bora Bora or skiing in the Swiss Alps, but you know, realistically, that might not happen this year. Never fear! There are plenty of places that will allow you to escape without draining your wallet dry.

Decide on your ride.

Travel costs could put a bigger dent than you’d like in that beautiful new budget. Remember to consider all of your options, including alternatives to flying. Would it be cheaper to take a bus, subway or ferry? How far are you willing to drive? If the cost of gas is the deciding factor, take the time to work out the numbers before assuming a plane ticket is the cheapest option.

If you decide to fly to your destination, there are several websites that can help find the cheapest flight for your trip. Are you willing to travel individually or on standby? It’s often easier to find great deals for one person at a time. Also, you can use the airline as a resource. Airlines will occasionally run specials without advertising them online. Make the call; it could pay off.

Find a place to stay.

This step can be tricky. Hotels get pricey – fast. So, before you book your reservation, tap your resources. Do you have friends or family in your destination area? If so, ask if they’d mind hosting you for a night or can they recommend inexpensive places to stay. Are you traveling with a group? Consider group-lodging options, with your group splitting a room or two and dividing the price to save on everyone’s costs. If your spring break takes you abroad, research hostels in the area.

Another option is to check out websites like www.VRBO.com, which put you in touch with people who rent out their vacation homes when they’re not using them. It’s often cheaper than a hotel.  If you’re willing to sleep on a couch or in a spare bedroom, you can also use a resource like www.couchsurfing.org to find an affordable place to stay.

Leave room to play.

If you plan the essentials the right way, you’ll still have some money for a little food n’ fun. Where you go from here depends on the priorities you have for your trip. Are you dying to sample the flavor of local cuisine? Maybe you spend a little extra money on your meals each day. Couldn’t care less what you eat long as you’re relaxing in the sun or exploring the area? Save some cash and visit a local grocery for sandwiches and snacks for the week. The trick is to budget the necessities appropriately, so you’ll have some leeway when you actually arrive at your spring break destination.

We want to hear what your plans are. Tell us about how you are planning your spring break, where you’re going and which budgeting techniques are helping you most!