Are you wary (as I am) about the safety of using debit cards (read my Reader’s Digest article about that)? Or would you rather not be tempted to overspend with your debit card? If so, did you know that many banks will let you “turn off” the point-of-sale purchase function on your card? Each bank or credit union has a different process for doing this, but try asking your financial institution to set the limit for all debit transactions on your card to “zero.” Voila! Your card is just an ATM card again. Read more about it on ClarkHoward.com.

So I started attending meetings of a popular weight-loss program in the fall, to finally lose that last bit of post-baby weight (does it matter that my “babies” are school-age now?). I’m sticking to the program and it’s working. But quite interestingly, our family budget is shaping up along with me!

Why? Turns out that a lot of the strategies for successful weight loss can also be applied to your finances. But maybe you already knew that.

Over the weekend, my SIL told me someone fraudulently tried to charge hundreds of dollars to her credit card for electronics. Thankfully, her card issuer flagged the purchase as suspicious and alerted her. They immediately issued her a new card.

But when my SIL went over past credit card statements to see if there were other bad transactions, she found a little trail of microcharges that were NOT hers. Some were so small she didn’t notice them the first time around. Apparently, the small charges are “tests” the thieves use to see if 1) Your card is good and 2) Whether you’ll notice their activity on your account.

I opened my credit card statement today and couldn’t believe it: It happened to me, too!

I used to cringe when my credit card statement arrived in the mail. And, actually, not because we carry a huge balance. We pay off our balance every month. Still, there would always be a couple of purchases I had forgotten about, and they would totally throw off my monthly budget.

I admit that I’m a bit anal about our monthly family budget. My friends and family know this and tease me about it. But I can’t help it. It’s in my genes. My dad was a tax preparer and math nut. It’s a built-in idiosyncrasy in my family!

So a couple of months ago, I figured out a solution in Quicken, my financial computer program of choice. (You’ll hear about my beloved Quicken often if you follow this blog, just to warn ya.)

What I do is this: I keep track of my credit card purchases in Quicken as we make them. And I have the program deduct them from the appropriate categories (Groceries, Dining Out, etc.) in our monthly budget as we go along. That way, when our credit card statement appears, I’ve already subtracted every plastic purchase from our monthly budget. No surprises! (Well, OK, fewer surprises. I still forget to record receipts from time to time.)

A June 2008 study by the market research firm Matthew Greenwald and Associates reveals that our parents attribute their ability to live comfortably in their retirement years to
* Avoiding credit card debt (81%)
* Having an emergency fund (86%)
* The ability to save well (79%)

Have subsequent generations followed suit? Read a good overview here. Or if you’re a detail person who wants the whole study, it’s here.

I’m intrigued by this article in the July 2008 issue of Money. Mostly because I’m hating my credit cards these days.

My issue with credit cards is not about racking up debt. We pay off our cards in full every month. But I have two gripes:
1. I feel like I spend more freely with plastic than with cash.
2. It’s tough to stick with a tight monthly budget when “old” purchases show up in a new month needing to be paid.