This is a sponsored post written by us on behalf of the Visa Clear Prepaid program and the Kaiku® Visa® Prepaid Card. All opinions came straight from our own noggins, not a robot’s.
Our very first month of budgeting, we drove to the nearest Staples and bought a ton of plain paper envelopes. We labeled them and excitedly filled them with cash. We were pumped to show our finances who was boss, and the envelope system of budgeting seemed like just the way to do it.
I mean, it was fool proof. Once an envelope ran out of money, we were done spending for the month — whether we liked it or not. Spending with something very finite also made us aware for the first time of every cent we spent because we were forced to think of each category as a separate bank account that was frequently hovering near zero. In short, the envelope system trained our brains to budget properly.
After a month or two with the envelope system, we quickly became aware of the drawbacks once we were relying on cash for everything. First, who still uses cash (except every food establishment in NYC)? In a fast-paced world where cash is rarely seen, it felt unnecessarily cumbersome to pay for everything with it. If we spontaneously needed to buy something and we didn’t have cash from our envelopes with us, tough luck. Nowadays, we buy almost everything online, from clothes to groceries to diapers, and if you haven’t checked recently, there’s no cash option. When we first started budgeting, we’d find ourselves buying something online with a credit card and then acting like a bank teller, moving money out of one envelope and then re-depositing it at our bank. It was weird and complicated. And eventually, it led us to stop using the cash-only system of budgeting. Why? Well, because we weren’t actually using cash-only and we weren’t willing to, either.
Have you been waiting for the “but”? Cause here it comes… BUT, we recently learned about a possible hybrid approach to the envelope system that provides all the perks without any of the drawbacks of that antiquated paper we call cash. Enter prepaid cards.
The idea behind a prepaid card is simple. You load whatever amount of money onto your card and you can spend and access it wherever debit cards are accepted. So think of it as your envelope, except now it’s convenient and plastic and it’s not something your grandma used to send you a gift card in and sealed with a kiss.
For the next few months, we’re teaming up with Kaiku and Visa to learn and try out the Kaiku® Visa® Prepaid Card, part of the Visa Clear Prepaid program. In the past, it has been hard to browse through the hundreds of prepaid card options and figure out what sort of fees they charged. No longer, peeps. In order to be part of the Visa Clear Prepaid program, cards are required to clearly communicate their monthly fee plan. That way you’ll know when you pay a fee and when you won’t. Beyond that, cards that are part of the Visa Clear Prepaid program also help protect you as a consumer by preventing overdrafts (and avoiding overdraft fees and spending more than your “envelope” aka budget allows).
Getting and activating the card was simple. The Kaiku® Visa® Prepaid Card is smartphone-friendly and we signed up right on their website. A week later, we received our card in the mail, which included instructions on how to load it with dough. You can put money on the card via mobile check deposit (7-10 business days, free), bank transfer (2-4 business days, free), or in person at a Visa Readylink location (funds available immediately, $2.95-$4.95 fee). Since we were running up on the end of the month, we stopped by a Visa Readylink location down the street and paid a couple bucks to load some money onto the card.
We’ve decided to give our grocery budget a whirl for our first month of trying it out. Most categories of our budget stay in line from month to month, but grocery always seemed to be the untamed beast (which we’ve detailed here), so we’re hoping that the prepaid card will reign in some of our we-buy-way-too-much-candy-for-our-age ways. Our biggest fear (and possibly perk) is knowing that there’s no backup reserve of cash. Once we’re out, we’re out. It’s also comforting to know that the card doesn’t permit overdrafting, but it will be weird working with such a fixed amount of money that doesn’t respond to our “but we deserve Mexican take out again!” pleas.
Anyway, we’re super excited to give it a whirl. Has anyone else tried using prepaid cards as an alternative to the envelope system? And what’s held you back from the keeping up with traditional envelope system?