That moment you realize your $19.99 monthly gym membership came out of your account and has now cost you a $35 overdraft fee. We’ve all been there, and it’s easy to forget what is coming in and out of your bank account. With electronic payments and direct deposits, mixed with the general chaos of life, how do you keep track of it all without incurring hefty fees from your bank? Well fear not, my friends…here are some simple tips you can follow to avoid overspending that leads to overdrafts.
1. Keep a register. I know, I know, it seems old fashioned. You picture your grandmother sitting at the kitchen table with her bank statement, checkbook and a bunch of receipts, marking off what has cleared and what hasn’t. It seems like a daunting task, yet I would bet that grandma has never paid an overdraft fee. That’s because this tried and true method is the best way to reconcile what you have to spend in your account.
Bring a check book register with you wherever you go (you should be able to get one for free from your bank) so you can write down any purchases you make. Be sure to include checks, automatic payments and the $40 dollars you took out of the ATM last night. And don’t forget about any monthly service fees you may be charged for your account. Writing these transactions in a register will let you know at all times what money you have to spend as long as you are being diligent in keeping track.
2. Go electronic. In addition to keeping your register up to date, using electronic banking options can help you track your balance. Frequently reviewing your transactions online will allow you to see what purchases have cleared and what is still pending on your account. This can be done right from your cell phone or tablet…at any time…anywhere.
Using online alerts is another great option many banks make available to customers. You may set these alerts up to send you a text or email if your account falls below a certain balance or becomes overdrawn, allowing you more time to make a deposit before a fee is incurred.
3. Opt out your debit card. If your bank offers a courtesy overdraft program, considered opting out for debit card transactions. Some banks may automatically enroll customers when opening new checking accounts. Be sure to ask your banker what their policy is and request to be opted out of the program. Opting out will help ensure that a debit card transaction does not go through if you don’t have enough money in your account. While it may be embarrassing for your card to be declined in a grocery store checkout line, it can save you a lot of money in overdraft fees.
Utilizing these options will help you feel in control of your money and keep it where you want it, in your account. Lastly, speak with your banker to find out what other programs may be available to protect you from overdrafts.