The Dollar Stretcher
by Gary Foreman
Dear Dollar Stretcher,
Like many couples, Leslie and her husband use an ATM frequently. And they must not be alone because consumers will pay about $2 billion this year for the privilege using them. And despite the fees, it's not surprising that they're popular. An ATM card and pin number makes getting cash much more convenient than in the old pre-ATM days.
One of the many money-related problems that my husband and I seem to encounter is related to ATM use. Frequently the card is used for cash withdrawals or purchases and the amounts are not routinely recorded in our checking account register. I love the convenience of the ATM card but want to know if you have any suggestions for using it wisely and with discretion. Should only my husband or myself have an ATM card as opposed to both of us?
But, like so many new tools, they can be used improperly. So what can Leslie and her husband do to get control of their ATM cards?
The first, and obvious, answer is to make absolutely sure that they enter any ATM transactions in their check register. Failure will not only make it harder to balance the checkbook, but could also mean that errors in their bank statement might go undetected.
One way to encourage proper recording would be to make a game of it. If hubby used the ATM and didn't record the transaction there would be a penalty. Perhaps some extra household chores. The idea is to make it a habit to record any transactions. We tend to remember things that are important to us.
Another way to regain control is to use the ATM card less often. It appears that their cards get a lot of use. And that can cause a couple of different problems.
Using the card frequently but on different days each week will make it harder to remember to list any transactions. It's just human nature. When we get home at the end of the day we typically think of dinner not doing our 'homework'.
There are other dangers of frequent use of ATMs. It can be an invitation to uncontrolled spending. Some people find it impossible to resist impulse purchases if they have access to cash. And while no one single purchase is large, when added up they can mess up a budget big time.
And there are the fees. Over 80% of all banks impose a surcharge if a non-customer uses their ATM machine. It doesn't seem like much, but a 75 cent fee on a $50 ATM withdrawal amounts to 1.5% of your money.
One way to avoid overuse problems is to schedule your ATM use. Don't just pull it out any time you want a couple of dollars. Rather use it once a week. Take out enough cash for your planned expenses for that week. Leave the card at home on other days.
You'll find a number of benefits with this strategy. First, when you only use it once a week it will be much easier to remember to enter the transaction in your check register. And if you do forget, it will be much easier to spot the missing week when you balance your checkbook.
Second, you'll have a better handle on whether money is slipping through your fingers. If your cash runs out before the end of the week you'll know that you're making unplanned purchases. They might be justified. But it's a good time to check for needless impulse spending.
Once a week ATM use means giving up a little convenience. But most of us have lives that are predictable enough that we should be able to know how much cash we'll need for the week.
Should Leslie and her husband only have one card? Or each have a card on a separate account? Clearly finding out that your spouse isn't recording their transactions could be a source of marital friction. So if they continue to forget entries, it's probably better to get rid of a card or open separate accounts. A second account would be an extra expense, but cheaper than a divorce lawyer!
Finally, a comment. Often ATM issues are symptoms of a deeper financial problem. Frequent use of ATMs and a failure to record transactions can be the sign of an undisciplined approach to money. It's a easy trap to fall into.
It seems like the credit card companies and banks want to make it easy for us to use money without thinking about what we're doing. When we pull out a card and get instant gratification there will be a price to be paid later. Not surprisingly, it's also a great way to boost company profits.
So the next time that you pull out that ATM card, make sure that you're using it as a handy tool. Not being used by it to create extra profits for your bank.
Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com You'll find hundreds of free articles to save you time and money.