It’s that dreaded moment.
You open up your banking app on your phone and see your checking-account balance with a minus sign in front of it. Your brain mumbles that dreaded word … overdraft!
You know what comes next. Not only did you spend the last of your money, you spent more than that. If you spent $35 but only had $10 in your account, the bank is going to get that other $25, make no mistake about it.
Then it’ll charge you $34 dollars for an overdraft fee. Why? Yeah, it’ll take money from you because you have no money. Now your account shows minus $59.
It’s time to stop this nonsense. While it might seem hard to keep your bank account above water, there are some simple ways to keep it afloat.
Get Paid Before Payday (No Loans Required)
If you arrange your monthly bills (think Netflix, car insurance, cell phone, etc.) to come out of your account just after your regular paydays, you can make life a lot easier. If you know you always get paid on the 15th and the last of the month, why not set up your payments to come out on the 2nd and the 17th? Give yourself a couple days of cushion for those pesky weekends.
Want a little extra protection? Consider jumping ship to a new bank that can get you your own money faster.
Chime is an online bank that is changing how banks operate. Not only does it offer options to help you save money without thinking about it, but you can even get your paychecks up to two days earlier than your co-workers.
To take advantage, make sure you sign up for direct deposit so that Chime can add money to your account as soon as it receives notification from your employer. It then immediately posts the funds to your account. Serious bonus: It has zero fees.
Say Goodbye to Overdraft Fees Forever
I once had a checking and banking account at a large national bank that would actually charge me a $6.95 monthly “account maintenance” fee for the savings account if I didn’t have at least $25 in it.
If you’re not sure what fees your bank is charging you, or even if you think you do, consider Trim your new best friend. Trim is a simple app that can save you a ton of money.
Simply sign up and connect your bank account to the app. Then, Trim analyzes your spending habits. You can also easily set up alerts. It’s payday? Great! My rent is due? Crap.
Not only that, it will also review all of your subscriptions that are connected to your account, like Netflix and Hulu. Didn’t know you were still paying for Hulu? Trim will let you know. And if you share a link to the app on Facebook, it will even cancel the unused subscription for you, as part of its premium service.
Boost Your Bank Account With a Side Hustle
What makes your bank account go? Your job. So, if you’re not keeping up enough speed, you may want to improve your earning horsepower. At The Penny Hoarder, we’re all about great side gigs. Think about it. If you’re earning more, you’ll have a little more cushion in that bank account. That means less chance of an overdraft. Here are a couple of options you can do in your spare time:
- Do you have an extra bedroom — or even a spare couch? Consider renting it out through Airbnb. Simply create a listing with photos and set your price. Do you want to rent it out daily, weekly or by the month? You may find more success by targeting the type of clientele you would like to find. Don’t have a spare bedroom? See if anyone wants to camp in your backyard!
- Do you have a newer car and like to drive? Consider signing up to be a Lyft driver. Lyft drivers can choose their own hours and make great extra cash simply by helping people around town.
- How about making money on the money you spend? Wait. What? Dosh is a new cash-back app that pays you back for making purchases at more than 100,000 hotels, online stores and restaurants — including Marriott, Cost Plus World Market, Target, Chuck E. Cheese’s and a lot more.
Plus, it’s simple:
Download the app and sign up.
Securely connect a debit or credit card.
Live your life and watch the cash-back roll in.
In addition to cash back, you can also collect a $25 bonus for booking your first hotel
through the app, as well bonuses for referring friends and local businesses.
Ask Your Bank for Help… but Remember to Say ‘Please’
OK, so you’ve already overdrafted. If you’re not a chronic offender, your first move is to try to undo the damage.
That means calling your bank and giving them your most humble and honest mea culpa. My bad.
Then ask for forgiveness. Many banks will forgive those outrageous overdraft fees just for asking. Remember, you are the customer and they need your business. Remind them that you’ve been a loyal customer.
Do you have other business with them, such as credit cards or loans? Bring that up. Be nice, but be firm in reminding them that you are a good customer who made a one-time error. You don’t want to jump ship, but you will if you need to.
Avoid Insane Overdraft Fees With Your Savings Account
It may sound impossible to have a savings account if you can’t keep your checking account in the black, but it’s worth thinking about.
Most banks will give you the option to have a savings account that is linked to your checking account. If you can manage to keep $100, or even $50, in this account, it can act as emergency funds that the bank pulls over in case of an overdraft. The key? There is no overdraft fee attached to this process.
Beware any overdraft protection services that your bank offers. Many of them come with crazy fees that will hurt you as much as help.
Your Best Weapon for Avoiding Overdraft Fees
Your checking account is your primary vehicle for your finances. It pays to keep it in tip-top condition so you can keep your financial progress on course.
Nothing rocks the boat like an overdraft fee. Luckily, you can minimize the damage and avoid them altogether by making a few changes in the way to do banking.
Full steam ahead!
Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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