How to avoid your overdraft
The role of a good money manager doesn’t end in saving money every month. A smart money manager is one who plans out a monthly budget, sticks to it and tracks each penny that is coming in and going out. In an age of electronic transactions, what most of us forget to do is track our spending.
Thanks to the plastic money that comes handy! You keep drawing from your bank accounts and never notice the dwindling balance. And one fine day you find an overdraft on your account to your utter dismay.
Repeated overdrafts not only add hefty overdraft fees on your account but often they swell into unpleasant debt situations, where you frantically wish you could stop creditor harassment.
Well, why let yourself in for such a crisis? Instead, gear up and stop overdrawing your bank account. Here are some useful tips on how to go about it:
- Write cheques or make transactions that can be cashed right away so you are left with no scope for overdraft. You can use electronic transfers where money moves from bank accounts much faster.
- Track your Direct Debits. If you do not record the deductions, you won’t know how much has been actually deducted from your account and that might lead to overdrawing of your account. Also make sure your Direct Debits are tracked before your pay cycle ends.
- Overdrafts mostly happen when you don’t track your cash machine withdrawals or keep a record of the purchases you made with your debit card. Also remember that cash machine withdrawals often charge extra if you use certain machines or use your card abroad.
- You can even do away with your debit card if you are poor at recording your purchases. In fact, using cash for buying everyday necessities makes more sense as you are likely to remember them easily.
- Make use of the mobile or internet banking services to access your account 24×7. Do not forget to check your account balance before you go out to buy anything.
- The best way to avoid overdrawing is to never let your bank account go out of balance. Check the record of your expenses against your monthly statement. Try and deposit as much money as you have spent the previous month.