“No matter what I do, I just can’t seem to avoid these bank fees”
I felt her pain because I have muttered those words in the past. That is when a light bulb came on in my head as I decided to write about how I got out of that slump many years ago. No matter how you tweak these 4 ways to avoid bank fees, the methods I discuss will always be the same.
Track Your Spending
While there are numerous ways to track your spending, the best and most effective way of avoiding overdraft fees is to track your spending. Over the years, technology has allowed this process to become more and more convenient by delivering a wide variety of options. The most important thing is that you choose the method that works best for you. Something may look awesome to you, but if you don’t feel comfortable using it all the time, it will be useless. Below are three great methods to track your spending and accomplish this goal.
Old School Checkbook Register
Old school or not, if you don’t use your phone or computer, this may be a viable option for you. It doesn’t have to be something fancy, a regular pencil and paper will do, as long as you are keeping track of everything.
There are many different options using your computer. Mint.com is an online personal finance management tool that allows you to do a number of things. //You can read more about the awesomeness of mint here. You can also use programs such as Excel or Quicken to track your spending.
This is my personal method of choice. There are plenty of apps out there (no matter what operating system you have i.e. Android, iOS, Blackberry etc.) that you can get and use for free. By tracking what I spend on my phone, I don’t have to carry around a checkbook register in my back pocket. I use “ClearCheck” on my Galaxy 2 Epic Touch daily to track my spending as well as have all of my account balances all in one place (without having to input private banking information. The best part of “ClearCheck” is the automatic syncing. Both my wife’s phone and mine sync instantly along with our i pad and ClearCheckbook.com account.
ClearCheck is by far the best personal finance tracking app that I have seen (and I’ve downloaded and used quite a lot). It allows you to create a budget that automatically updates as you track your spending. As you make a purchase, take a moment right then to record your transaction in your check register app. Just a few taps on a screen and you are done. You get all of that in one FREE app. (Special thanks to Andrea, from sooverdebt.com, for introducing me to ClearCheck App.)
Once you have a method that works well for you, stick with it. Make sure you log-in to your online banking account at least 1-2 times a week to see when your transactions clear. This is very important to avoid overdraft fees or charges. By doing this, you will have to the opportunity to catch any transactions you failed to track before it is too late (I check mine every day. It only takes a minute or two max if you do this regularly), mistakes do happen.
Set in mind that when you reach your minimum balance ($50 or $100 or whatever you choose), you can’t spend any more. There are a lot of banks that have a minimum balance, and if your balance drops below that amount then you are penalized. If you are someone who has a bank that charges a fee like this, I highly recommend setting your own minimum balance at least $50 more than what your bank’s minimum balance is. If you don’t have to worry about minimum balances at your bank, congratulations, however, you still want to avoid overdraft fees so tracking every purchase that is made is still inevitable.
Imagine you have a checking account with “BANK X” that charges you a fee when your account drops below $50. If you set your personal minimum balance $50 above that, then your personal minimum balance would then be $100. Now, anytime your register shows your checking account for Bank X with a balance of $100, you act as if (spend as if) you have $0. Lets say you have a balance of $125 in your checking account. You then make a purchase that cost $50. Your personal minimum balance is what saved you from getting penalized by Bank X and their fees.
Get A Bank Without Crazy Fees
In the past, we have allowed the banks to control our finances and make us pay them for their services. Today, we can easily switch bank accounts with just a few clicks of a mouse. You can find both checking and savings accounts that pay you to have your money with them. This seems like a no brainer to me, and once you are at a bank that gives you cash back and better interest with no fees, you won’t have to worry about having a fee for dropping below your minimum balance, online bill pay, online transfers etc..
You can read more on how to open an online bank and transfer your money there in my post “How To Make The Switch To Online Banking And Why“. I also have a post that reviews a few great options you can choose from for high interest savings accounts.
Listed above are 4 different ways to avoid bank fees, did I leave something out? I am sure you know of something I didn’t mention here. Please share a comment below about how you avoid bank fees.
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Special thanks to Andrea @sooverdebt for the introducing me to ClearCheck App.
Photo of Woman Holding Checkbook by Betssssy
Photo of Woman Balancing Checkbook by SurvivalWoman