Be Like Britney: Live On $1,500 a Week

Britney Spear can now get back to her midnight shopping tours of Hollywood convenience stores. On a budget.

On March 10 a Los Angeles judge ruled that Spears, who is reportedly worth $40 million, will be allowed to spend $1,500 each week on a debit card. The court set the singer’s spending limit the same day that Britney's father, Jamie Spears' role as conservator over his daughter’s estate was extended until July. Geraldine Wyle, Jamie’s attorney, told the court the allowance would enable Britney to "spend money, have her freedom, and make choices about how she wants to enjoy her life."

Given Britney’s unpredictable behavior as of late, a debit card is likely the safest way to re-introduce her to money. (That's because Britney’s frequent shopping trips will now only last as long as the $1,500 does.) But are ATM cards a good way to curtail spending for the rest of us? They can be, especially if you are trying to stick to a budget.

“Debit cards are a good tool that can be used for automatic payments. With credit cards, you can end up spending money that you don’t have,” says Jay Berger, a certified financial planner in Traverse City, Mich. With a debit card, funds are immediately transferred from a checking account to the merchant's bank account. In a sense, debit cards can be viewed as electronic checks. This is opposed to credit cards, which allow people to spend borrowed money, which must then be repaid at the end of each month. Credit cards often have high interest fees for people who carry a balance on their card. Keeping a balance month to month can sometimes lead to serious debt.

However, debit cards users are not exempt from fees. If someone uses their debit card but there are not enough funds to cover the payment, the transaction is treated like a bounced check. For every overdraft most banks charge a one-time fee to the customer as do retail locations, typically theses fees might run you $50, total. But Berger says that an overdraft fee may not be all that bad, as long you learn a lesson. “It’s a good thing. It’s like putting your hand on the fire; once you do it the first time you will remember not to do it again.” Also, overdraft fees are a one time only charge, while credit card interest is carried from statement to statement, and continues to compound until the bill is completely paid off.