Could Opening a Venmo Account Lead You to Overspend?

It's certainly possible for that to happen.

I have to admit that I was somewhat of a late adopter when it came to Venmo. In fact, for quite some time, I was that friend who had to send a check in the mail or hit the ATM for cash to reimburse people for purchases.

But one day, I finally got over the hump and decided to give Venmo a try. Linking it to my checking account was easy, and from basically that day forward, I've used Venmo consistently.

Not only do I use Venmo to reimburse people when they purchase things on my behalf, but I often use it as a means of payment when someone provides a service they charge for. Some home contractors, for example, accept Venmo.

Plus, for years now, I've volunteered as the class parent at my kids' schools. That means I'm constantly collecting money for things like classroom parties, supplies, and teacher gifts. And Venmo makes all of that much more convenient.

But there's a downside I've encountered to using Venmo. And it's a pitfall you might fall victim to as well.

When you stop keeping track of your money

During periods when I'm using Venmo a lot (such as during the holidays, when I collect money for teacher gifts), I'm keenly aware of what my Venmo balance looks like. But during periods when I'm not doing class parent duties, I tend to ignore my Venmo account.

That's not a good thing, though, because in some cases, it means forgetting about several hundred dollars that should really go into my checking account. Granted, Venmo won't just take your money if you let it sit for a while. But it's still a good idea to keep tabs on your cash, and using Venmo sometimes causes me to stray from that.

But that's not even my main issue with using Venmo. While it's super convenient, it also has, at times, contributed to me overspending.

Sometimes, I'll be tempted to buy something only to realize I don't have cash on me and paying with a credit card isn't an option. But if the vendor takes Venmo, I'm all set.

Only, I'm not really all set, because I'm still spending money. I'm just less likely to account for that spending because I'm depleting a Venmo balance rather than handing over a wad of bills.

Also, Venmo doesn't force you to keep a balance there. If your Venmo balance is $0, you can still use the app to pay -- the money will just come out of your linked checking account.

But that's not good, because what you might do is continuously make Venmo payments, all the while drawing down your checking account without realizing it. That could lead to a situation where you write a check and don't have enough money in your account to cover it.

Be careful with Venmo

To be clear, I'm a fan of using Venmo. If it weren't for Venmo, my class parent duties would become pretty cumbersome.

At the same time, it's important to acknowledge that Venmo could easily lead to overspending. And so if you're going to open a Venmo account, it's a good idea to keep track of your spending and treat that account as you would a regular checking account.