Overdraft fees are expensive and annoying. I haven’t had to pay one in several years now, and I’d love it if you never had to pay them again, either.
But you are the one who will have to take action so I can have what I want: for you to never pay overdraft fees again.
Are you in?
There was a time in my life I was plagued by overdraft fees from the bank.
They used to really tick me off, because once you have one overdraft fee they can just pile up on each other if you keep making charges.
Overdraft fees must represent a good portion of the bank’s profits, so let’s agree together to get on the NO MORE OVERDRAFT FEES TRAIN.
So, How Can You Put a Stop to Overdraft Fees?
Cancel your auto drafts and don’t sign up for any more.
Auto drafts are when you allow a vendor to automatically take money out of your account every month. Does it make sense to you that someone should be able to come into your house, get into your wallet and take money whenever they want? No. I know it doesn’t, but that’s what auto drafts are. I only have a few small auto drafts coming out of my accounts—for things like Hootsuite, Dropbox and Pandora.
Create a Spending Account with its Own Debit Card
I’ve been teaching this method for years, and since I’ve personally adopted it I’ve never had so much freedom and control—yes, at the same time—with my money. I have an account I call Today’s Fun which is essentially my bi-monthly allowance. When that balance gets to $0, I am done spending until the next payday.
View Your Transactions Every Single Day
Yes, I do mean every day. I have four active checking accounts (two personal and one for each of my LLCs) and I check my accounts every day. Most days it takes less than 2 minutes. This action alone will completely transform your finances.
If you have multiple accounts at multiple banks, you can either log into all of your banks for a few moments or you can get an aggregation tool like Mint.com. I provide Guide Financial for the students in my programs.
In this way, I know exactly what’s happening in my accounts and how much money is left there. I know there is no fraud in my accounts and I don’t have to remember where I went for dinner three weeks ago because I’m late checking charges. I occasionally catch double charges, and then I’m able to contact the business owner and right things quickly.
I also don’t balance any checkbooks. I punished myself for years because I could never manage to do that, letting paperwork, mail, bills and cancelled checks stack up in boxes and paper bags. That was a huge emotional drain that I lifted when I stopped asking myself to do what I was never going to do and created a system to supersede it that I can live within.
And it all works. And no overdraft fees.
Let me hear from you in the comments: Either what’s your best strategy to avoid overdraft fees, or what are you going to try differently now in order to avoid them?