Single and Settling In

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I am so over OVERDRAFT fees!

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These wonderful little fees have become my worst nightmare.  When I was using credit cards, I never dealt with these fees because if my account got low, I charged! 

Well, as I work my budget and unforeseen expenses come up, sometimes I come up a little short the day before my paycheck goes in.  I never realized how much I would learn about the ins and outs of overdrafts.  The one thing I found right off the bat is because banks are going through the same recession we are, they are not as flexible as they used to be when these fees occur.  In actuality, I have found that some of the rules have changed dramatically with my bank, and I really had to research to understand exactly how the overdrafts were calculated. 

For example, with my bank, even if there is a charge "pending" on my account--not cleared, just pending-- it's possible to incur an overdraft charge. Even if there are sufficient funds when it clears, they still might charge if there weren't funds available when it was "pending." How can I explain it?  It is like an officer giving you a speeding ticket because he thinks you are going to speed! 

Or, if I have 5 pending charges on my account, with enough of funds to cover, but before they process another charge comes in that there are not enough funds to cover - I will get the overdraft fees on all of the charges pending, not just the one that pushed it over. 

These are all things I had to learn.  A $35.00 fee is a big deal on my budget; now, four $35.00 fees are staggering for me.  Once those fees hit - it is so hard for folks like us who are budgeting to the last penny to get back in the black, because once you are in overdraft it is like a domino effect.  So, how do you stop it?  What can you do to help prevent these little fees from destroying your budget?  I found a great article with a couple of tips that have actually helped me....check it out.

I love the "envelope" concept.  My mom mentioned that to me and I thought it was very "old school", but guess what?  It works.

Keep going back to your budget - don't lose track of it.  I have found that monitoring my every penny has been my saving grace - once you lose track of that budget, you lose track of where your money is going.  If you haven't made a budget yet, take a look at some of my older blogs, especially "Hey There, What's Your P & L."

Would love to hear some other tips about these nasty little fees....anyone got some good ones?

Katie Simmons

Katie is a participant in the CareOne Debt Management Plan. Katie is a contributing writer for the Single & settling in blog. Katie's story is not unique.  She lived beyond her means and it caught up to her!  Over 2 years ago she made the decision that no one could get her out of the mess she created with her debt, but her.  Since then, she has embarked on an adventure of learning how to take care of herself without credit cards in her life and how hard it can be to be single and in debt.  She is experiencing every challenge and every success while working her hardest to be debt free. Compensated CareOne Blogger.

 

  • Katie, I am soooooo with you on this, down to the mom suggestion of the envelope system! I can't tell you how many tears and phone calls have been wasted begging my bank to explain/waive overdraft fees. I used to try to outsmart the system but now I've resigned myself to the fact that I WILL NOT WIN. As a result I've just gotten more strict with myself and game plan for the worst case banking scenario (ie assuming it will take two business days for a deposit to clear, assuming any checks I write will be cashed IMMEDIATELY, etc). Also, it's important to understand exaclty what your bank's policy is - I switched banks recently from a bank that debited based on timestamp to a bank that will post a deposit first in line as long as it's in by the end of the business day. I don't have direct deposit with my paycheck, so something like that makes a huge difference in terms of risk. Also, if you can get into a credit union, they are usually a "kinder" breed of banking institution. Good luck all!

  • It is so nice to know I am not the only one out there with this problem!  Don't you feel like even when you do understand your bank's fees - they change them!  I guess it shows the sign of our times, I remember when waiving fees was easy to do when you were a long standing customer (especially with begging and tears) not so much anymore, banks aren't budging!  Thanks for the additional tips and insight - every piece of advice helps at this point!

  • If you are looking for some quality information, tips on saving and more; than browse our blogs! We have fantastic bloggers from all ages and walks of life; who all share one thing in common; they are focused on finances! Here are this week's featured

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