I don’t know about you, but my checking account makes me nervous. Years ago when I was younger and got my first-first job right out of high school(I was a busboy at a burger restaurant), I started making some real money for the first time in my life. I was making actual money and it was all mine –albeit it was minimum wage. With this cash flow I began to make actual purchases that I couldn’t ever before. I would cash my checks the day I got them and then proceed to go straight to the store to buy whatever I wanted. What I didn’t realize was the way banking worked: a check often takes time to cash itself and become useable in an account depending on the time you deposited it.
Buying all these things and thinking I could afford them, I was loving life as a worker, and then the mail came. In it was a letter addressed to me (which was exciting because who gets mail as a recent high school grad?) and it was from the bank, and inside it was a bill for an overdraft fee that I had to pay. I was spending more than what was in the account at one time, and therefore I was slapped with a 40 dollar fine! I was crushed, not just because 40 dollars was a lot of money to me back then, but because I was working the system that I thought I was using correctly, wrong.
Even though that one instance happened years and years ago, I still remember it like it was yesterday, and it makes me nervous every time I swipe the debit card or check my checking account. It’s not that there are not sufficient funds in there anymore, it’s that with all the transfers and auto-pays I have connected within the account, I wonder if the checking account has gotten too low since my last check in. Asking around to my friends and co-workers, they have mixed reactions to my story and situation, with some being sympathetic and relating, and others saying that I need to just pay more attention (which they’re probably right.)
Below is how you can avoid what happened to 17 year-old-me and keep your checking account from turning on you.
Keep track of how much you really have and how fees work.
What I believed back then was that if my account was depleted, then the card swipe would be rejected due to inefficient funds, right? This was only half true, as I found out. Apparently, if you want the “declined card due to lack of proper funds” feature activated for your card, you must ask for this feature to be switched on. If not, the card will be accepted with no issues, keeping you in the dark about the fee you just racked up as you go about your day continuing to make more purchases with your empty card.
Talk to your bank about this feature and have them set your account options so that it will be declined if you have a lack of funds. The banks are designed to make money off of you in any creative way they can, and this overdraft fee is definitely one of those ways.
More than anything else, you have to keep track of what you earn. If you only make so much in a single pay period, then chances are you cannot buy something in one single debit card swipe that costs more than a single paycheck. Keep track of how much funds you really have and make per paycheck, and it will keep you mentally aligned with what you really can afford and what you should realistically hold off of for now.
Take advantage of modern banking.
I certainly did not have a smart phone when I first started working, and the mobile apps craze was not yet available to me, but I certainly wish that it was. The wonderful innovations that we have today such as mobile apps designed for bank accounts and other financial management services are crazy useful, and that’s just what’s on your phone. Here are some other facets that you should take advantage of.
- Direct deposit
More than likely, wherever you work provides the option of receiving your paycheck through direct deposit. This option allows your earnings to be automatically wired to your linked accounts on the set day and time that your employer sets, every time and on the dot.
If you are busier and always seem to run out of time during the day to hit the ATM to cash it, or are just plain forgetful and vulnerable to losing your physical paycheck (we’ve all lost at least one, come on), then direct deposit should be an option that is to be taken advantage of.
- Online accounts
You no longer have to hit the ATM or wait in line for a bank teller to tell you how poor you are anymore. Now, you can do that home! Whether you were nervous like me or just trying to keep tabs on your growing funds in their various accounts, you can check in anytime you want by just logging into your bank’s or selected financial management’s website from the comfort of your own home. Just be sure to log back out when you are done counting your money, as all it takes is one mis-click and the next person to use the computer can move all your money around to wherever they want –so don’t go to the Apple store and check your bank account on one of the display MacBooks there.
Also, check in on your account more often than just the times you are depositing another check. Regular check-ins will keep you informed of how your funds are doing, which could lead to discovering that you might need to ease up on your spending, or even if there is the possibly of your funds being drained by fraud. Check in often.
- Mobile apps
Mobile apps on smartphones are all the rage right now and probably forever will be until we design eyewear that will beam the programs right into our brains. Until then, we will have to settle for the mobile apps being inside of our handheld smartphones. Take advantage of mobile apps offered by banks like Wells Fargo, or Bank of America, or Citibank, or Ally, or wherever you have money stored because wherever you are, you can securely log on and take a peek at your available funds. This kind of technology could have saved me 40 bucks those years ago, so it is something that I now use frequently.
If you need help when it comes to your finances, then there are many mobile apps designed to keep all your accounts viewable on one single dashboard with suggestions and charts and purchase records to help keep you mindful of your finances. Apps like the one offered by Mint is great because it can automatically create budgets for you and your checking accounts so that you won’t go over and into a possible overdraft fee. It will also alert you if you get close to empty, as well as let you know when you get slapped with any fees.
Don’t be afraid to call up the bank and dispute.
One thing I learned about working with banks is that they are very customer centered, and want more than anything else, for you to keep your money with them. This desire to keep the customer happy and forever satisfied is something that you, the customer, can take advantage of. If there is ever an issue that you notice or feel wronged by, then you are within full rights to march over to your local bank branch and talk it out with them. Doing so more than likely will have the fee or action in question dropped. Don’t be afraid to call or visit your bank to dispute any issues if you are unhappy with anything that has come your way, because it will more than likely lead to you coming out on top.
You don’t have to be afraid of your checking account, regardless if you make 20k a year or 50k or even 100k. It’s about mindfulness and diligence in being realistic with what you actually have, as well as keeping tabs on what is actually available versus what you think is available. Take advantage of all the innovations we have at our disposal with modern banking: account surveillance, automatic transfers and bill pays, even mobile and home account access.
The more control you have over your checking accounts, the more relaxed and empowered you will feel about your overall finances. It all starts with peace of mind.