We’re all complaining how much less we make versus how much we owe out, complaints about living pay check to pay check, and to the opposite side of the spectrum, the extreme of hearing, “…I just got my car repossessed the other day.”
A lot of griping and moaning of how the economy has tanked, about employers not giving the well deserved yearly increases in base pay that employees have seen in the previous years because wages have been stagnant at the same wage for the past couple years, and the plethora of excuses that one person can pin on someone or something. A lot of these may be true, but instead of being reactive to changes, you can start being proactive in finding ways to help you prevent the negatives in your checking account.
It’s all too clear that the banking system makes big bucks year over year on returned insufficient funds fees. I too have had returns in the past but that was well over 12 years ago, and I haven’t had anything come back since. I want to educate each and every one of you what I’ve done so that you can align yourself with these 5 key advices that will prevent you from ever going into the negatives again with your checking account.
1: Know your monthly expenses. Knowing all your monthly expenses is key to a healthy checking or savings account. I have an Excel Sheet created for knowing all my monthly expenses and allotting so much for this expenditure, so that I know how much I would roughly have left over for other spending. If you aren’t Excel savvy, simply recording these expenses on a planner that you can save or putting it on a piece of paper so you can review with your significant other when your compiling your bills to make them out.
2: Budget out your monthly bills. Know the dates they are due and making sure that once you have sent a payment to that company/creditor you are subtracting this amount off your checking transaction ledger booklet. The Checking/Savings transaction ledger booklets are given to everyone when you open a checking/savings account through your bank. You can tally up to add or minus what you’ve spent so you can keep up with how much you have leftover in your account. If you share a checking/savings account with someone else, make sure you both are keeping each other in the loop of your spending funds. It would also be wise to do the bills together so that you both know where the funds are going.
3: Review your monthly bank and credit card statements. You will never know what fees banks are charging you, if you’re unfamiliar with the fees don’t hesitate to call them to investigate because you may get some of these miscellaneous fees refunded back to you. Make sure your statement matches your checking transaction ledger, if the statement shows other transaction that you’re unfamiliar with; research on it and find out where that certain amount came from. From my personal experience, I’ve gotten money back from a company who was taking 2 transactions from my account month over month because I was on their autopay draft program. The autopay drafts were on different times of the month and because the balance was a mere $30 month over month I made a presumption that the difference was due to my wife spending the funds on other miscellaneous that I wasn’t aware of at that time. After further research, I’ve found that the autopay drafts were pulling from my checking account for well over 2 years. I called the utility company to investigate; they were able to find the mistake and refunded me every penny of it. I ended up getting a check back in my hand right before Christmas for well over $1,000.00 plus to do some more shopping for the kids.
4: Frugality pays off. If you are budgeting and you’re just barely making enough for leftover, aside food and gasoline for vehicle, but funds for clothing for the family and leisure spending for fun. One way is couponing which has shown that if you can put an effort into couponing it pays off in the long run. Never buy full price at department stores, as seasonal sales are always ongoing everyday at these store. Second hand clothing stores and thrift store doesn’t sound enticing, but you’ll be surprise at what they have to offers you and your family. You can still buy brand name clothing and find that their clothing looks almost new. Leisure spending may be a little harder, but there are always deals and discount going on for fun. Look for cool parks in your area, look for free events and neighborhood or city events, or discount days at certain theme parks/city zoo. A lot of state funded or non-profit organization funded museums may offer free days once a month for family. Always take the time to call your local community and investigate. There are plenty of things to do for free but you must research to find this information.
5: Live within means. Just because you work at a fast food restaurant doesn’t mean you can afford a Lexus type car. You have to gauge if things are either necessary or just unnecessary by asking if these items or things are going to be a necessity (need) or a luxury (superfluous, not needing). If it is a need, as in a car because you need transportation to and from work, would a Toyota Corolla be sufficient versus a Lexus CT. You have to rationalize with yourself in what really makes more sense at this time in your life. If you can’t really support yourself with the better more luxurious vehicle, then get the cheaper of the two. Just don’t go spending because you have the money now, make sure you are putting this new expense into your budget and making sure that it will work for you month over month for the duration that you will have to pay for this expense. Just because it’s going to make you look cool doesn’t mean you need it.
This is as simple as it gets folks. A lot of these advices may sound simple and very basic, but a lot of people out there aren’t looking at the practicality of ways in helping themselves. You may have one or 2 of these systems in usage but forgetting to keep tabs on this system in one month or not utilizing the others that I’ve mentioned may have you finding yourself back in an unhealthy checking or savings account. Being in the know about your finances is always the best way to ensure a healthy checking and savings account. Once you are out of this phase you can start saving more money in your pocket.