Few things may seem as exciting as finally getting a full-time job, as this is typically your first time to taste financial management and independence. But the new freedom also comes with several important financial responsibilities, especially as far as banking is concerned.
Many employers today use a payroll card to disburse salaries, so you may already be relieved that you have that option if you’re currently unbanked. But only keeping your money in a payroll account and only using your payroll card is not an ideal arrangement; it’s a good idea to get a separate debit card ASAP.
Here are seven reasons a separate debit card is essential towards better financial management for a first jobber:
1) Smarter Spending
First, you should get a separate debit card to keep your finances organized. When your payroll card doubles as your main spending card, it’s easy to overspend and lose sight of your savings goals.
Transfer a set amount to an account associated with your personal debit card, like your Maya account, for fixed expenses and savings, and use your payroll account for discretionary spending. This will create a natural spending limit and better safeguard your savings.
Many standalone debit cards also connect to digital banking platforms with excellent savings features, like higher interest rates. The simple mechanism of compartmentalizing your money will also help you manage your finances and focus on your savings goals.
2) Enhanced Security
Relying solely on your payroll card for transactions poses a security risk. If your payroll card is compromised through phishing, skimming, or other fraudulent activities, your hard-earned salary is directly at stake. A separate debit card will minimize this risk by acting as a buffer. You’ll keep only the amount you need for daily transactions in your payroll account, and the bulk of your funds will be safe in your personal debit card.
Additionally, there are circumstances when an employer or other entity can “freeze” payroll accounts, typically for suspicion of fraud. If that happens and all your funds are in that basket, you won’t get access until they’re released. There’s no telling how long that will take, so it’s good to keep your money from both accounts separate.
3) Better Financial Management Habits
Separate debit cards often come with features that can make your life easier. For example, some standalone debit cards allow seamless online and offline transactions, free withdrawals from partner ATMs, and digital wallets widely accepted for e-commerce.
Together, these conveniences can help you build good financial habits. For instance, you can use one debit card to pay bills and another for online purchases. Your payroll card can have just enough for daily cash needs like lunch or transportation. You won’t have to worry about making too great of an inroad into your salary with impulse spending.
Financial discipline is a skill that’s crucial for young professionals, and having a separate debit card encourages you to practice it. Upon transferring the bulk of your salary to your personal debit card, you’ll naturally learn how to budget better. You’ll develop the discipline to resist the urge to overspend because your main account is off-limits for impulsive purchases.
Also remember that life is unpredictable, and financial emergencies can happen anytime. You can dedicate one debit account to maintaining an emergency fund that you’ll be able to access easily. Set it up with a system where it serves as a fallback option for unplanned expenses, which will ensure that you’re financially prepared for anything.
4) Reduced Fees
Dependence on your employer-provided payroll card may also limit your financial freedom. Many payroll cards are tied to specific banks, which may charge higher fees for transactions outside their network.
With a separate debit card account, you’re no longer bound by these restrictions. You can choose a card that caters to your needs: lower transaction fees, more withdrawal options, or better digital tools for managing your money—the Philippines’ Maya Bank being an excellent example.
5) Better Credit
While debit cards don’t directly impact your credit score, responsible money management through separate accounts can prepare you for future financial milestones. Showing good control over your spending and saving habits will give you more leverage when applying for a car loan, mortgage, or credit card, for example. A clear distinction between your accounts will make it easier to show a healthy financial profile to potential lenders.
6) Perks and Rewards
A number of excellent debit card products come with rewards programs, discounts, and cashback offers. Choosing the right card will allow you to enjoy these perks while maintaining your financial independence.
Some debit cards also offer exclusive dining, travel, or online shopping deals. This can be a huge plus for first-jobbers just beginning to explore their lifestyle choices.
7) Future-Proofed Finances
Lastly, having a separate debit card is not just about convenience. It’s also about setting the stage for long-term financial health. As you progress in your career, your financial needs will evolve. A separate card will allow you to build a system that grows with you, offering flexibility and control over your finances.
Fresh Starts for First Jobbers on Their Financial Management Journeys
Opening a separate debit card account is a simple and affordable thing to do. Look for options that suit your spending habits and offer digital banking features for convenience, flexibility, security, and ease of use. These are all crucial for first jobbers looking to take charge of their finances.
There’s no better time than now to make smarter decisions for your financial management journey; get a good head start and enroll in a debit card program that’s separate from the one associated with your workplace’s payroll card.
