Keeping a minimum balance in your bank account can keep you from having to deal with all those annoying overdraft fees.
When I was younger, I always thought I could get away with charging small amounts to my debit card when I only had around $20 left. What I seemed to not realize was that, there were always charges from previous purchases that hadn't cleared in my account yet, and that my account was pretty much around zero all the time.
So, what ended up happening was that I would buy a $6 sandwich or something, but my account really only had $5 left in it, so I'd overdraft my account by a dollar and end up having to pay a $35 overdraft fee.
The worst part?
Sometimes I'd have multiple purchases waiting to be posted on my account, so not only did I overdraw my account once, I did it two, three, four, or five times, resulting in multiple $35 charges! It was an extreme headache looking at over a hundred dollars worth of overdraft fees. Those two to five dollar purchases were suddenly becoming my worst nightmare, as the fees grew exponentially.
My advice?
Try to keep a minimum of a hundred dollars or so in your checking account at all times. When it gets that low, try not to use your debit card to purchase anything, just to be safe. Start using cash for all your purchases from then on, or just try to avoid spending anything until your bank account has a bigger safety net around it.
Of course, if you are already a frugal penny pincher, this rule doesn't apply to you. This tip is mostly for college students or recent grads who haven't learned to save money all that well yet. Honestly, it's better not to spend anything when your bank account is that low because really the headache you'll get from multiple overdraft fees really isn't worth that $5 lunch you just bought.
More tips later.
-mm
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