Consumers find effective budgeting is harder than it sounds
Financial Articles December 25th. 2009, 6:26pm For people who are struggling to get their debts under control, one commonly offered piece of advice is to draw up a budget plan and stick with it. However, a recent survey suggests that many people find this much more difficult than it might sound.
According to the survey that was commissioned by Visa, the average consumer cannot account for $21 of spending in any given week, which comes out to more than $1,000 per year. The problem tends to be even more pronounced among consumers in the 18 to 24 year old age group, which loses track of about $2,500 in spending in any given year.
“Even for the most organized spender, it can be tough to keep track of every cup of coffee, greeting card, teachers gift or stocking stuffer picked up at the mall and paid for with cash. While cash purchases can be difficult to track, the survey revealed that consumers believe debit cards can help them monitor spending more closely and stay within budget,” said Visa Chief Economist Wayne Best.
The survey found that much of these “mystery” expenditures are thought to end up going for food and grocery items, as well as non-essential leisure shopping, nights on the town, and dining out. On average, consumers reported that they lose track of about 20 percent of the cash they spend in any given week.
The survey comes at a time when a growing number of consumers have already embraced debit cards and cash at the expense of credit cards, which can saddle users with high interest rates and an increasingly creative selection of fees and other costs. In fact, a separate report from Visa earlier this year noted that debit cards had actually overtaken credit cards as the payment method of choice for the most consumers, largely because of the debt management issues they can help people avoid. 
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Carefully following a budget can be surprisingly difficult.
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