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Did you know that the median overdraft fee on a checking account is $26? Here are three quick tips on how to avoid those pesky fees.
1. Don't trust your "Available Balance" - This could be a part of one of my Wednesday rants. Never trust your available balance. I'm talking about the balance the ATM gives you whenever you're taking money out, or depositing money in to your account. It's always higher than what you actually have. I think mine is usually about $500 higher. Apparently this is the amount they'll cover for you, but don't think they'll do that for free. It comes with a hefty cost.
2. Balance your checkbook - This is by far the best way to know exactly how much money you have in the bank. It will help you avoid overdraft fees, and you'll be able to catch any errors the bank may have made. You have to be very diligent about making sure every transaction is put in the checkbook, otherwise you're wasting your time. Invest a couple hours a week to keeping the checkbook up to date, it'll be well worth it.
3. Create an artificial buffer - Decide on a certain amount that you'll always keep in your account, and don't dip into it. It may be $100, $500, or $1,000, the amount just needs to be enough to keep you safe in case you accidentally go over. You may even want to go ahead and subtract the amount out of your checkbook, that way the balance you see is what you can spend. Having a buffer is a huge stress reliever. You never have to worry about bouncing a check when you have a large buffer in place.
Carnivals I Participated In This Week
Carnival of Twenty Something Finances: I was included for my article Christmas, It'll be here sooner than you think.
Carnival of Money Stories: I was included for my article Have a plan.
1. Don't trust your "Available Balance" - This could be a part of one of my Wednesday rants. Never trust your available balance. I'm talking about the balance the ATM gives you whenever you're taking money out, or depositing money in to your account. It's always higher than what you actually have. I think mine is usually about $500 higher. Apparently this is the amount they'll cover for you, but don't think they'll do that for free. It comes with a hefty cost.
2. Balance your checkbook - This is by far the best way to know exactly how much money you have in the bank. It will help you avoid overdraft fees, and you'll be able to catch any errors the bank may have made. You have to be very diligent about making sure every transaction is put in the checkbook, otherwise you're wasting your time. Invest a couple hours a week to keeping the checkbook up to date, it'll be well worth it.
3. Create an artificial buffer - Decide on a certain amount that you'll always keep in your account, and don't dip into it. It may be $100, $500, or $1,000, the amount just needs to be enough to keep you safe in case you accidentally go over. You may even want to go ahead and subtract the amount out of your checkbook, that way the balance you see is what you can spend. Having a buffer is a huge stress reliever. You never have to worry about bouncing a check when you have a large buffer in place.
Carnivals I Participated In This Week
Carnival of Twenty Something Finances: I was included for my article Christmas, It'll be here sooner than you think.
Carnival of Money Stories: I was included for my article Have a plan.
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