Building a good savings habit is important to secure your financial future. Savings help you in emergencies and they also let you enjoy a quality life. A debit card is one crucial tool that can assist you in shaping those habits. Being the most accessible and convenient way of making payments, they also allow you to manage your spending from your savings account directly. It helps you track your expenses and maintain financial discipline. In this post, we will look at how you can use your debit card to build good money habits.
Advantages of savings
Before we dive into the details, it is essential to know the benefits of savings. Here are some reasons why you should inculcate a savings habit:
Provides financial independence
To make yourself self-sufficient and have a comfortable life, savings are important. Then, you are free and in charge to spend your money whatever you like.
Reduces financial strain
Your financial needs change at every stage of your life, and when you have adequate savings, you are less likely to be stressed about future goals like retirement. You can enjoy peace of mind when you have sufficient funds to navigate different life stages.
Ability to take risks
With enough money, you can start your own business or pursue your passion without the pressure of generating instant income. In a nutshell, you can take calculated risks based on the amount of savings.
Enhances security
The future is filled with uncertainties, and financial emergencies can arise anytime. The money in your savings account acts as a safety net that can cover your future expenses and unplanned monetary needs.
How can you save with a debit card?
Explore the different ways how you can leverage a debit card and inculcate better savings habits.
Monitor your spending
The first thing you need to do is prepare a budget. And for that, you will have to chart out the necessary and unwanted expenses by checking in the transaction history. This will help you know where your money is going.
Escape the temptation to overspend
Once you have listed down your expenses, you will be able to spot if there are any unnecessary purchases, deductions, or automated payments that you do not require anymore. Always keep text and e-mail alerts on. Additionally, avoid impulsive buying decisions. Think before you put your money, be it extra purchases to skip delivery on online purchases or buying more than you need during the sale season.
Mindful spending
Using a debit card makes you more aware of how each purchase affects your account balance. This awareness helps you make smarter choices, focusing on essentials and avoiding impulsive spending.
Achieve goal-oriented savings
If you have two accounts, you can use debit cards strategically by linking them to separate savings accounts for specific financial goals, such as a vacation or down payment. This makes it easier for you to allocate funds effectively.
Opt for automating savings plan
Many debit cards let you setup a scheduled transfer to your savings account from your salary accounts. It allows you to set aside money from your income before you have a chance to spend money. This helps you create a financial cushion over time.
Choose a debit card with better features
Yes, choosing the right debit card is another crucial thing for you to maximise your savings. Select a card that offers cashbacks and discounts on purchases. Also, look for features like no or low annual fees, minimal or zero transaction fees and so on. You can also opt for a card that provides exclusive benefits. For instance, Kotak811 Debit Card offers you with unmatched offers and discounts on your favourite shopping and dining brands. You can apply for a debit card online to make the most of these rewards.
Endnote
Debit cards are just one way to track your spending and save. There are several ways to save build more wealth. This includes high-yield savings accounts, mutual funds, or tax-saving investment options like ELSS (Equity Linked Savings Scheme). Evaluate all the options available and prepare a plan accordingly.
