I’ve been thinking about debit cards quite a bit and how they relate to an overall lack of awareness regarding finances in general and budgeting specifically.  Debit cards certainly have a convenience factor and I’m not opposed to their use IF accurate accounting is used to keep track of expenditures and cash withdrawals.  What I see more frequently though is checking account balancing by ATM account balance amount.

Like the old joke about “I can’t be overdrawn, I still have checks left”, verifying the account balance occasionally doesn’t tell the complete story of personal finance.

Personally, I keep every receipt for every transaction and withdrawal, subtract those amounts from my checking account balance and use a spreadsheet for determining whether spending is in line with our budgetary goals.  That takes about half an hour every week, but there’s quite a bit of peace of mind that comes with that.  I know not only what is in the account today, but what expenses are coming up in the next few weeks that will need to be funded.

What I see other people doing is something very different.  When I use an ATM (my bank only to avoid ATM fees) or go to a store, I see people using debit cards and trashing receipts immediately after their transaction.  Anecdotal, I know, but I see it with such frequency that it has to be a fairly common behavior throughout the US.  How can someone keep track of their expenditures when they don’t keep receipts?  They can’t unless they have a much better memory than me.

My conclusion is there is a very significant part of the US population that is literally living without any expense planning, but just living and spending according to whether they appear to have funds available in their account.  I’m sure it’s lucrative for the banks, because they probably end up piling on fees when people make “mistakes”, but it sure isn’t a trend that I’d like to see continue.

Maybe I’m wrong though, and all those people I see casually dumping receipts are actually fairly affluent and spend time either going through bank statements or regularly use online banking services to keep track of, and chart expenses and budgeting.
I don’t believe I’m wrong.