Or better yet, get a checking account that offers free overdraft protection by linking to your savings account. Check out The College Investor’s list of the best checking accounts.
Young Adult Personal Finance and Investing
About Robert
Most Popular
LOL. I used to get mad at the bank for charging overdraft fees, but looking back I understand that I was clearly the idiot.
I never kept enough money in the checking account…I always spent it all (and some when it was all gone)!
While some fees are outrageous, you can’t always blame the bank for making a buck.
You make a simple and excellent point Robert! Many overdraft fees are probably a result of inattention–people don’t keep an eye on their balance, or they forget about automatic withdrawals, etc.
On the other hand, some banks have gotten into trouble for processing daily transactions in a particular order designed to create overdraft fees, a major revenue source for banks. Process all the checks before that big deposit, and, voila! a momentary overdraft is created. So consumers shouldn’t even cut it close–get those deposits in early!
Very true. And since you can’t be certain about the order of operations, just don’t cut it so close!
That’s why I advocate getting a month ahead on your budget. You don’t worry about this stuff when your bills are already accounted for at the beginning of the month. Unexpected expense comes up? Use your savings bucket. Emergency? Use your emergency fund. There are so many ways to prevent this, it’s ridiculous. But don’t ask anyone to take personal responsibility…..that would be ridiculous. This post made me LoL. Sometimes finances are so easy it hurts!
…
Wow, that was a rant I didn’t intent to go on…phew!
KISS – Keep It Simple Stupid!
Totally true. I’m lucky and have never had an overdraft fee but I know I am probably the exception to the norm. You can also turn overdrafting off through your debit card at some banks so you can’t do it.
Yes you can, and you can also link it to your savings account to prevent the fees as well.
I had this problem