Resist the 'Cash Dash': Three Reasons to Avoid Frequent ATM Use

When she was in her 20s, Lauren Stevens visited automated teller machines at least twice a week. Working as a bartender at the time, Stevens used the machines to deposit her tips...but she withdrew plenty of cash, too.

She made a point, she said, of using cash instead of credit in an effort to limit her spending, but the strategy often failed. Instead, Stevens would just return to an ATM again when she was low on cash but needed funds for a night out. The result? Stevens often blew her budget.

"All common sense went out the window," she joked.

Today, Stevens, now a writer in her 30s, is more careful about budgeting and her trips to the ATM are rare. Much of her banking and shopping, she added, is done online anyway.

But even as some consumers like Stevens cut back on their ATM usage or even go cashless, cash machines still cater to much of America, including the tech-savvy. A survey released by the Federal Reserve in March found that 82 percent of smartphone users had used an ATM in the last year -- of those, 87 percent had used one within the last month.

Mitchell Weiss, who teaches finance classes at the University of Hartford and Rutgers, finds that many of his students don't track their ATM use, which means they may make more than two or three visits a week. It may surprise many, but he argues frequent ATM use can pose problems. Here are three reasons why:

Fees: If your wallet is thin but you have a sudden need for cash, you might hit the most convenient ATM — and that ATM might belong to another bank, which opens the door to costly fees. Before you know it, "your cash dash could end up costing you dollars that can really start to add up," Weiss writes.

A survey this month from Bankrate.com found that ATM fees that banks charge to noncustomers and out-of-network fees that banks charge to their own customers (when they use competing banks' ATMs) both hit record highs this year. On average, an out-of-network withdrawal will cost you a total of $4.57, according to Bankrate.

Record-Keeping Errors: The "more times you visit the ATM, the more chances there are for you to forget to record the withdrawal you just made," Weiss writes. Failing to keep accurate records could lead you to overdraw your account, which could leave you facing even more fees. (Overdraft fees set a record high this year, too, according to Bankrate.)

You Could Blow Your Budget: Even when you have a spending target in mind, frequent trips to an ATM could sabotage your best intentions, as Lauren Stevens experienced firsthand. "Pocket money has a funny way of getting spent, and ATMs that are sitting out there 24/7 — all lit up and colorful — make it easy for you to forget that you’re trying really hard to stay on target," Weiss writes.

So what's an ATM user to do? The answer comes down to common sense...and, of course, budgeting. Weiss recommends deciding in advance how much cash you can spend in a week and withdrawing it either all at once or over the course of no more than two ATM trips at an in-network ATM. That way, instead of making cash dashes, you can focus on racing toward your financial goals.