Dealing only in cash
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| Sun, 01-24-2010 - 2:15pm |
In our efforts to help our parents with their problems, we are trying to lay out a plan for them. We will take in their income and pay their bills, put some of their money into savings and give them the rest of their money. However, we think they will spend it all at once at the beginning of the month, so we'd like to split it up and give them a certain amount every week. The next question is how will they spend? We think it's best for them to just deal in cash. They have a tendency to overdraw their account, so we think "no checks" is one way to go. So, we would deposit their money into a savings account. From there we would like them to deal in all cash, but just curious if it's possible for them to have a debit card to use with a savings account. I don't think they would lose their wallets or leave their money somewhere, but it might be safer to use a debit card rather than carrying around cash. But they cannot have overdraft protection because they would overdraw and then end up with a negative balance.
I guess my question is "Can you use a debit card with a savings account?" I know they would have an ATM card, but what if they want to buy something online? We want them to have as much freedom as possible while putting protections in place so they cannot get into trouble.


Yup, I agree. You can do a checking account without overdraft protection (or hook it up to a small savings account). But I read an article lately that indicated that even DENIED charged would be hit with the $35 fee.
Another alternative is to get a prepaid VISA/MC. I've gotten them service charge free from BB&T and Suntrust banks. That would be a PITA but at least they couldn't overdraw the accounts.
I don't know if savings accounts come with debit cards or not, but I would suggest trying to find a VISA/MC debit card if possible. We do NOT use CC at all and we LOVE our debit cards! Oh, come to think of it, I have a paypal debit card and that's free for me unless I get a cash advance at an ATM. (Cash back at a store is free with a PIN purchase). That might be an idea for a "savings account" with a debit card (also has VISA or MC logo so it can be used like a CC). There's a small fee for transferring money, but they do NOT charge overdraft fees. My account has been a few cents in the red twice in the last year and they simply sent me an email reminder to fix it, no harm done. (Both times it was after a purchase for gas had been authorized and then disappeared on me and I forgot about it - groan).
FLINGING DEBT:
Once you get the numbers on the prepaid, take a look at paypal to compare. The ONLY time I've ever been negative has been getting gas b/c those charges "disappear" and come back later - and that involves timing, LOL. (They do the same in my bank accounts - all of them, and we have several). Either way, they've never charged a fee. I think the transfer fee is less than 3% plus you get cash back for using the card, AND you can see all the transactions online. Depending on how much you plan to get each time, it may turn out to be cheaper to go through them.
I love what you're doing though, and I wish you tons of success!
FLINGING DEBT:
Thanks. The best thing for them is to have cash because if they can physically see on Wednesday that they only have one $20 bill left to last them until Sunday then they cannot say "we thought we had more". Also, they always claim "bad luck" on everything and wouldn't you know it, that one time they get gas and it overdraws the account will be the cause of their bad luck and not being able to pay for a meal at a restaurant. However, having said that, they would like to go places and use a debit card. Or they might want to buy online and that will require a card of some sort.
We would propose putting money into a savings account for emergencies and they would not have access to those funds. If an emergency comes up they'll have to call us and have us pay for it out of their emergency fund. The question will be in determining what is an emergency. Being at a restaurant and not having any money when they've already eaten will be an emergency to them because they are in deep do do if they can't pay, but to us it's a bad choice, not an emergency.
I hate to say this, but think "teenagers".
I think you guys are SMART!
I'm an only child and I handle my mom's bills. She hates doing it and I love the numbers game, so it works out well. She keeps enough for gas, some groceries, and her phone/internet/cable (and almost no spending money). She gives me the rest and I pay her mortgage and the rest of her expenses (no debts). The system works GREAT for us. I hope you guys can meet up with some success. =c) I know it's tough, but I admire what you're trying to do. Once you establish a system, life should be much easier for you and your sibs!
FLINGING DEBT:
I can confirm that even if your account is set up w/NO overdraft you can still get hit with a charge. My bank advised that even if they deny the charge some merchants and card companies will push the charge through anyway. This forces the bank to pay the charge & pass that on to you - in the form of a fee.
Nice huh??
I know. It should be ok IF they agree to our plan, but so far they are saying no until they see something in black and white. Even if they end up saying yes and allow us to do this, I doubt we will ever get past all the hurt feelings. Best case is that I'll tell my mom that I don't believe anything she said to me during that time and I forgive her knowing that she was just defensive and probably a little scared to give up some independence. Best case is that she responds by ignoring my feelings altogether and we go back to a fairly surfacy relationship where all we talk about is the kids.
We were never REALLY close anyway. Everything has been very guarded on my part. I watch every word that I say because I don't know how she's going to react.
My siblings and I are all very close, however. And maybe that's what matters because my parents will not be around forever and in the end, all we'll have is each other.
Right. That's why we're trying to plug the holes. That's why we want them to have a savings account with cash and only deal in cash. I think the prepaid visa card is good. Once it's empty it's empty and they can reload it with their cash. The hard part will be getting them to agree to not go and open a checking account on their own. I would think their credit would be bad enough that they don't open an account, but I guess banks will still do it for them. They wont have their auto deposit, however, so maybe that will prevent them from being able to open an account.
I wish I could run their credit report, but I'm sure it's not legal to do that without their permission. We'd ask for permission if they gave the green light so we could make sure they don't have anything that needs to be paid off.
The other issue is that I want them to be free to answer their phone if it rings. I know they screen their calls. They said it's because they get a lot of sales calls, but I'm sure they just don't want to talk to creditors or collection agencies. This will allow them to freely answer their phone.
You can use a debit card to withdraw cash from the ATM, directly from savings.
Norma
"Patience is the best remedy for every trouble"- Plautus