{"id":1495,"date":"2008-06-24T11:00:22","date_gmt":"2008-06-24T18:00:22","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=1495"},"modified":"2020-12-12T22:29:54","modified_gmt":"2020-12-13T06:29:54","slug":"how-to-avoid-overdraft-fees","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/how-to-avoid-overdraft-fees\/","title":{"rendered":"How to avoid bank overdraft fees"},"content":{"rendered":"

Last fall, I discovered my Quicken data file from the mid-1990s. It contains all my transactions from 01 January 1995 until 06 April 1998. There are many<\/em> fascinating insights to be gleaned from my crazy spending a decade ago, but as I was looking through my checkbook register, one thing in particular stood out.<\/p>\n

Before nearly every paycheck, my bank balance would dwindle to $12.33 or $7.14 or something similar. When I was paid, the balance would shoot up for a day or two, only to be spent right away. Sometimes, in fact, I overspent. During these 3-1\/2 years, I racked up a couple hundred dollars in overdraft fees.<\/p>\n

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On one particularly bad day, my bank socked me with three overdraft charges at once. When the notice came in the mail, my stomach sank. How could I be so stupid? Speaking as one who’s been there, overdraft fees are an indication that you’re not tracking your finances as closely as you think you are<\/strong>. Tracking finances only through receipts, or only through your bank’s website is inadequate. You need to keep a separate ledger (perhaps a checkbook register) or use a piece of software (such as Quicken) in order to track every<\/em> expense.<\/p>\n

If you live paycheck-to-paycheck and fail to track every expense, you will<\/em> experience overdraft fees from time-to-time. It may be more convenient to track your expenses only through your bank’s website, but if you do so, you must understand there are always going to be checks and other transactions “in process” that don’t show online, and consider overdraft fees the price you pay for adhering to such a system.<\/p>\n

There are other ways to compensate for chronic overdrafts<\/strong>, of course:<\/p>\n