Get Out of Odious Overdraft
Posted by Gail | Filed under Debt Traps
One of the questions I am asked most often is, “If I’m constantly in overdraft, how do I come up with the money to start the jars?” This is actually two separate questions: “How do I start the jars?” and “How do I get out of overdraft?” I’ve dealt with the first question before, so let’s just head on over to questions number two.
The families I work with are often in overdraft at some point in their month. Some of them spend virtually the whole month in overdraft. And some have no overdraft protection (or the wrong plan) so they end up paying exorbitant fees for NSF transactions. You’ve no doubt seen me give people the What For because they’ve been racking up $300/month bank fees. What a waste of money!
Being in overdraft is a strong indication that you’re not:
a) living within your means, and
b) keeping track your expenses.
If you want to get out of overdraft and back into the black, it will likely take some belt-tightening for a few months. Here’s how to do it.
1. Make a list of your monthly Fixed Essential Expenses… The bills that you have to cover every month like your mortgage and car payment, your minimums on your debt and your childcare expenses. Total it up.
2. Make a list of your monthly Variable Essential Expenses…The costs that you simply can’t avoid, like food and gas. Be careful now, we’re not talking fancy food and lotsnlotsa gas… we’re talking the bare minimums to get you through the month. There’s no clothing, no movies, no shopping at all on this list. Total it up.
3. Subtract these two totals from your income. How much do you have left? If you don’t have enough to cover the unessential expenses in your life – the fancy cell phone, the uppity satellite service and the like, you can see your problem. Time to cut back on the nice-to-haves until you’re out of the hole. Change your services to the most basic you can get away with.
4. Commit to living on this very harsh, very tight budget for a month. Just one month. Take all the rest of the money you make and stick it in an envelope, a jar, or a high interest savings account… as long as you don’t spend it.
5. You’re not allowed to use your credit during this process. You are, in essence, having a No Shop Month.
6. When you get to the end of the month, add up how much you’ve got left after all your bills have been paid. Is it enough to cover your overdraft? If it is, then you’ll have to live through this belt-tightening horror for one more month to build up the buffer you need to never go into overdraft again. If it’s not, you may have to feel the pain for a few more months until you’re in the clear.
From here forward, you want that buffer stored in an account that’s linked to your primary transaction account so that if you see your account running a little low, you can transfer some money from your buffer account to keep you afloat.
You are also going to become meticulous at tracking your spending. After all, you don’t want to have to go through this pain again, right?
Some people create a buffer in their transaction account to prevent overdrafts, keeping a couple of hundred dollars in their chequing account that they never allow themselves to spend. If their balance ever falls below that level, they simply stop spending. While they’re not overdrawn as far as the bank is concerned – so there are no fees – they’re overdrawn in their own eyes and go without until the next paycheque hits the bank.
Getting out from under Odious Overdraft is not easy task. But you can do it if you’re determined to stop paying the bank for your lack of self-control. Yes, it’ll hurt for a month or four. But the relief of being back in the black is fabulous. Let me know how it goes.
March 9, 2010 at 7:45 am
A couple more things to keep in mind…overdraft protection is 21% interest…another good reason not to “live” in it…also if your take home pay every 2 weeks is 1000.00 then an overdraft limit larger than that makes no sense as you’ll never get out of it…the limit should be less than your bi-weekly take home amount so that you can cover it…(you must cover it every 60 days at least once or it can be revoked…read the fine print!)…also, it should be used as it is intended…for a short bridge or for an oops!…not for everyday living costs..it does have it’s purpose but it’s only as good as the person operating it….
March 9, 2010 at 8:18 am
I transfer on paper all the left-over planned spending (that is like in the transportation section where included in the budget are things that happen only once every three months like oil changes) out of the chequing account but in reality it stays there, I just don’t spend it. The amount set aside for planned spending is generally big enough at any given moment to ensure I don’t pay a bank fee – I call it the “float”. I was really mad yesterday because I had to send someone money by email for something they bought for me, and had to pay $1.50 email transaction bank fee. That’s the first bank charge I’ve paid in almost a year. Very annoying since for so many years I contributed to the bank’s profit line with all my crazy indebtedness….
March 9, 2010 at 8:20 am
My mum always taught me that every woman should have enough “extra cash” on hand to be able to “get the h3ll out” just in case anything went wrong.
I always keep an “extra” 1000 dollars in my chequing account. It serves two purposes: getaway money and artificial floor on my bank account.
March 9, 2010 at 8:42 am
@MP…my biggest bill each month is the grocery…does that mean that by now I should have free groceries???…Safeway makes huge profits and I have contributed greatly to that bottom line…but, I don’t get ANYTHING for free when I go there…I take advantage of the sales and the airmiles they offer…
March 9, 2010 at 9:05 am
Kate – I do the same thing although I started doing it because it was almost enforced by the bank. If my chequing account dips below $2000 I get charged a fee. So I don’t let it dip below that and I know that I have a cushion should anything happen.
March 9, 2010 at 9:08 am
My wife works in the banking world and notes that there is a lot of people out there living in overdraft as if it is part of thier income. They get pretty ticked when the bank wont cash a cheque and apply it to the balance owing. We dont use our primary acct for a buffer but have a saving account that we keep a float. We are now making our second attempt at jars, its been a month and we’re doing pretty good, the hard part is self control on jars that need to build up such as our entertainment/sports jar so we can save enough for our sons swimming and soccer fees. Since the transportation jar would contain a large amount for what is set aside for repairs we opened an ING account. Its also handy with ING that you cant get your money on a moments notice (takes 2 business days).
March 9, 2010 at 9:39 am
Well, this is very hard for me to write, as for the first time in my life, I am swimming in overdraft. I have always had overdraft protection, but never needed it. In fact, I had cancelled it for a long time. I re-instated it because I live in the US now, and need to send funds to Canada to cover a loan payment I have there. Sometimes the cheques I send to Canada take longer to get there than I had anticipated, and suddenly the bank is now putting a “hold” on my cheque, since it is in foreign currency. That part of the overdraft is not the bad part. The bad part is that we had several expenses in December and January that cleaned out our savings and emergency funds, and I had to use the overdraft to pay some credit cards. Well, now, it seems like it’s a vicious cycle, and it is on my mind everyday. Next month, however, I am going to clean up this mess, as I get some extra money. Never again will I use this, as it is so true, that once you’re in it, it is hard to get out of it. I am almost at my limit of $2,000 in overdraft. This does not make me a happy camper.
I am pleased to read so many success stories here, but sometimes the unexpected happens and wipes all your savings and emegency funds out. I hate that! But I know that things are getting better, as we are really working on the budget, even with my husband’s hours being cut at work. I feel so broke somedays, but I strive to remain positive.
March 9, 2010 at 9:43 am
Gail, I was wondering if it would be good to treat overdraft as a credit card when setting up the snowball payment method you have described? For example, my overdraft is $1,250, and my fees and interest make up an effective rate of 15%. Including it with the credit cards places it’s payment priority between my two cards. I’m curious as to everyone’s thoughts on this and if may be a good idea. As oberdraft has no “minimum” payment, I arbitrarily double my effective interest rate for purposes of the snowball calculations.
March 9, 2010 at 10:15 am
I like the idea of a float to prevent overdraft, but be careful about making it too big. Keeping $1000 to $2000 can mean forfeiting the much higher interest (if you can call it that these days) it would would earn in a savings account. If your aim is just to avoid going below zero, you can safely get away with a couple of hundred dollars.
March 9, 2010 at 11:06 am
Since I first moved out on my own, there are two things I always take care of one is rent (have to have somewhere to live) and not go into overdraft. I am biased against overdraft.
so @Gaby… take my advice with a grain of salt, but I would pay the overdraft first. I just find that mentally, literally not having a penny to my name, is kind of defeating. Also, while I can do without credit cards etc, I will always have to have a bank account, so my reasoning says, take care of that which I know I will have forever. It may also effect future bank transactions I may wish to make.
And for people getting paid bi-weekly, don’t forget the month with a third pay in it – June lovely June — don’t make plans to buy anything, go on vacation etc… get out of overdraft, or get a great lump sum addition to your !
My bf and I actually made a jar for a shiny sparkly item — it may be unusual, but I think it’s kind of romantic. He makes much less than me — so we are matching contributions to that jar.
March 9, 2010 at 11:07 am
hmmm, the lump sum addition is to your overdraft prevention float… (sorry didn’t finish typing that sentence apparently…)
March 9, 2010 at 11:09 am
Since following Gail’s budgeting strategies, I no longer dip into my overdraft at all. I only have $500 ODP so it really was just for the occasional oops, but if I’m paying proper attention (as I am now), I shouldn’t have any “oopsies. It doesn’t cost me anything to have the protection hiding in the background as I’m on the plan where you only pay if you use it. I do NOT intend to ever need it because now I actually have money in the bank in an emergency fund and I have money in the bank in a spending fund so YAY for me on finally getting my act together and no longer depending on an artificial safety net!
March 9, 2010 at 11:14 am
DH and I were always in overdraft – usually up to the full $500 on our account. This meant we were paying a fee each time the account dipped into overdraft, plus the interest. When we started tracking expenses, we amalgamated our all of our banking (we had been using separate accounts for various expenses). The first month we essentially took a $500 hit to get out of overdraft, and we’ve never looked back. We were lucky in that amalgamating our accounts into that one provided a “cash infusion” that we wouldn’t have had if we had started off with one joint account in overdraft.
I still get excited when I see a small interest payment going into our account instead of fees and interest being deducted. Tracking expenses has definitely worked – we have not gone into overdraft since.
March 9, 2010 at 11:26 am
@Gaby – Yup, overdraft is debt, so you need to treat it as such and pay it off. But more importantly, as soon as you do pay it off, you need to cancel it, just like will when you pay off your credit cards.
Also, something people overlook are the basic account fees and minimum balances. Even if you have TD’s cheapest chequing account, you pay $3.95 per month. But, if you can keep a float of $1,000 in that account at all times, they’ll waive the fee. That’s an effective return of 4.7% annually. Better than any savings account and most GICs right now.
And the return can get bigger for bigger accounts. My husband and I have the super-duper account – $24.95 per month. But we keep the minimum balance and the account waves the $99 annual fee on our credit card. Effective return on that float? 7.9% annually.
March 9, 2010 at 11:52 am
@Sparky:
Switch to PC Financial! Get a PC Mastercard and shop at No Frills (primarily), earn points with every purchase and rack them up! I’ve had mine for almost 1.5 years, am single and have already gotten free groceries 5 times. It works!
March 9, 2010 at 12:04 pm
@Sandra…I work for a bank so I wouldn’t switch to PC Financial…I believe in the bricks and mortar bank and am willing to pay…also, I don’t find Superstore much of a “deal”..(we don’t have NO Frills) here…my point was just that there are many things in day to day life that we pay for…whether it’s banking, food, clothing shelter etc…we all need to be cognizant of getting the most for our money but some fees are a fact of life and we are not entitled to everything for nothing just because we’ve already paid before…
Thanks for the info though Sandra:)
March 9, 2010 at 12:08 pm
We also have our account at TD Canada Trust. We never let the balance go below $1000 and never pay fees.
On the spreadsheet where I track all our planned spending (and update with actuals as the weeks pass) I have a column showing the running balance after each paydeposit or planned expense. I have it set up to turn that balance yellow if it goes below $1200 as a warning, and turn red if it’s below $1000. This way I can see days/week/months in advance what any particular purchase (or loss of income) will do to our balance and have time to take evasive measures. If we’re close one week, it may mean I wait to pay the hydro bill until Friday afternoon, knowing my pay will be deposited Friday morning. No point putting the balance under $1000 for the sake of a few hours and incurring a month’s fees. We can’t prevent the automatic withdrawls (mortgage) but for the items where we choose the day we pay, sometimes it does make a difference to wait a day. Moving many of our other bills to automatically go in the VISA (phone, cell, internet, insurance) means I can control which day they get paid. Yes the phone bill goes on the VISA on the same day it used to come out of our account, but now I can wait a couple of days to pay it if there’s an advantage. I pay off the VISA every week – I know I don’t have to, but I like to keep on top of the transactions and it’s the source of most of the charges I need to update our spreadsheet of planned spending. If I don’t keep the spreadsheet up to day, I don’t have the true current picture of where we stand.
March 9, 2010 at 12:30 pm
@Jenn: I run a very similar budget process as you do, minus the colour coding. I use my CT mastercard to get the CT money reward, and as soon as I come home I pay the MC. Jenn, are you saying you are able to have car insurance paid by your CC….that wouldbe awesome for additional reawrds, never thought of having fixed expenses like that paid via CC off the top then paying the CC.
March 9, 2010 at 12:54 pm
We never use overdraft, but it’s important not to think that it’s ‘money’ that you have. It’s actually anti-money.
March 9, 2010 at 1:44 pm
We keep a full month’s worth of expense money in our chequing account so that at the beginning of every month all the money that we need for our bills and cash purchases is already sitting there. The money we earn during that month goes into the bank for the next month. It took us a long time and a big effort to get one month ahead in our chequing account but it has been very worth it. We never have bounced cheques or go into overdraft and I can pay every bill just as soon as it comes in so we never have late fees or interest charges. And no more speeding tickets from racing down the road trying to get to the bank to deposit a cheque before the cheques I already wrote start to bounce. The bank keeps calling to tell us that we have a lot of money not earning interest and I just say thanks, I know. I am quite happy to be payng for the peace of mind and besides there is no savings account out there that would pay interest that would even come close to equalling just one NSF fee. This system works great for us and makes budgeting and planning very simple.
March 9, 2010 at 1:49 pm
GabyYYZ, if your credit card offers a lower rate for cash advances than your ODP, I would recommend consolating the two. Otherwise, I agee to snoball it. Get out of ODP and into a positive balance, then snowball the ccrds.
I don’t have a problem with ODP. I think it can be a good thing – if it’s used for it’s intended purpose – protection. It doesn’t cost you if you don’t use it, but at least it’s there should something go wrong. For example, I’ve talked to a lot of customers who have been in a situation where they deposited a cheque from someone only to find it came back returned. They had already accessed the funds, leaving the account in the negative for the cheque amount. That has to be paid back. Have ODP would have saved the day.
The thing to keep in mind is that you can’t stay in ODP forever. I work for a bank, and our policy is that the account must come up to a positive balance at least once every 30 days. If you go into ODP, there is a $5 fee plus interest on the amount you are in ODP and for the duration.
As for the $1.50 e-mail $ transfer fee, I have to agree with Sparky. It’s a convenience. What is your time worth? You are saving time/gas/money not having to travel to another bank to deposit or to get the cash to the recipient.
I use this feature of on-line banking all the time. It’s very helpful to me.
Sure it sucks to have a fee, but the banks are not going to suck it up because they have to pay Certapay to do the transfer of funds. If we choose the convenience, we need to pay.
March 9, 2010 at 2:04 pm
@jenn – any chance you could share your spreadsheets? templates? i also use our PC MC for as many expenses as possible (including cable, telephone(s), 407 ETR) and get anywhere from $40-$120 worth of free groceries per month, and ensure the card gets paid in full each month.
March 9, 2010 at 2:08 pm
I’ve been there. When my maternity leave ran out AND my job had been dissolved AND I couldn’t find another job that worked around any daycare hours that had any spaces, AND the husband had been cut back to 4 days a week… I lived in overdraft BIG TIME. It was a very stressfull time.
Now I have a “float” in my checking account. If I can keep the balance above $1000 for the entire month, then I don’t get the service charge on the account. So it’s a $12 incentive to keep me above that! My husband’s bank doesn’t offer such a nice incentive but he gets ulcers if it drops below $1500, so he has his own physical check!
March 9, 2010 at 2:15 pm
@ Frugalistas: haha, I like the word “anti-money”
March 9, 2010 at 3:13 pm
I’m also with TD Canada Trust. I make sure there’s enough in the chequing account at the beginning of each month to cover regular expenses and also maintain a cushion of two thousand so I never pay any bank fees. I don’t keep any type of record but usual go through the drivethru to check the balance mid month. If the funds are getting low I’ll make a transfer. I don’t really know how an overdraft works but if it costs money it doesn’t seem like a wise idea.
March 9, 2010 at 3:44 pm
Just want to report that after a 4 month hiatus from the jars, we are back on the bandwagon and it was my husband that insisted on it which is great as he wasn’t enitely sold on the idea the first time round.
As for overdraft I always think of my parents, they never had overdraft or credit cards. If there was no money there was no money, period. I think we are spoiled with all of these safety nets. If you are stuggling to get out of overdraft just keep telling yourself that the Bank of …. is buying your lunch today, the Bank of … is putting gas in your car today. The Bank of … is paying for your kids new bike helmet. Using that phrasing will help keep you on the straight and narrow! Good luck
March 9, 2010 at 4:20 pm
Ugh, overdraft!!! When I was with my ex we lived in overdraft continuously. I guess we must have come up for air every now and then when our pay was depositied, but towards the end I honestly couldn’t tell you. I was so sick and tired of arguing over how much we owed on this card, or that LOC, or the other overdraft and that I hated living on ‘the bank’s money’ that I finally ended up sticking my head in the sand and letting him run the money show. I just couldn’t make him understand that credit was not a form of income!
Now I run my own money show, and even though it’s not perfect (getting better daily thanks to Gail) I sleep well at night. I no longer have ODP because I see no reason to pay $7.00 (I think) a month just for the luxury. I have accidentally overdrawn my account but my bank account allows me to do that for a $5.00 fee plus interest. Of the twice that has happened in the past 3 (ex free) years I figure I’ve spent ~$15.00 total. Compared to… ummm… seven times twelve times three… where’s my calculator! It’s a savings in my book
March 9, 2010 at 4:46 pm
Nobody has mentioned the All-In-One HELOC offerings at several banks. These can be used as “no-fee” chequing accounts. I pay all my bills (including mortgage) through my HELOC account, and our paychecks gets deposited there also.
I make sure my balances are in line with my monthly expenses. I never paid one cent of overdraft in my entire life. I do pay interests more than I would like to however.
March 9, 2010 at 5:06 pm
@John this year I switched our house/cars/RV insurance from automatically coming out of the bank account monthly to paying it as a one time lump sum on VISA (and got a discount for doing it). They won’t do monthly on the VISA, but apparently in 2010 they’ll allow it to be split over 3 payments on VISA, but no discount. Haven’t decided which option I’ll take. You’ll have to check with your insurance company to see what they offer. The phone, cell, internet, all go automatically to the VISA. Ontario Hydro won’t accept VISA so I manually pay that using online banking so I can control which day it goes out. Next month I’m switching our life insurance from monthly out of our bank account to annually on the credit card. If you’re expecting a tax refund it can be a good time to make this sort of switch. Use refund money to pay an annual fee upfront and then take that monthly charge off your list of things to pay each month. If you do it any other time of year you’ll have to save up a full year payment before you can drop the monthly which may be difficult.
I put everything I possibly can on my CC – there’s no way I want to miss out on the rewards. In another few weeks we’ll have the last few miles we need for our 4 tickets to Europe. LOVE free travel for doing what I would have done anyway. I’ve even got my Tim Horton’s card automatically reloading from my CC when it drops below $5. You can’t use a visa in the store (and I might feel stupid for $1.52) so this way I get the rewards and don’t have to dig for change. I’ve cut back my coffee habit to a couple a week so it’s not a big budget item any more, but every little bit helps. If you’re collecting Aeroplan points as we are don’t forget to swipe the actual card everywhere they take it. Those points are in addition to the ones earned on the VISA. If you go to the aeroplan website to book a rental car for your holiday you get points for booking it there, points for swiping your card when you pick up the rental and points for using your visa. The points trifecta!
I’d be happy to share my spreadsheet with anyone who wants it. Is there a way to post things on this site for others to download? If not I can try posting a little sample or giving you the formulas to put in the various cells.
March 9, 2010 at 5:17 pm
@SimpleSavings Only $5.00 for an overdraft fee. Here in the United States I get charged $30.00 per item. In February we had President’s Holiday, no mail that Monday, so my unemployment check was delayed. Had to write a check for food at the grocery store. It bounced, and started a snowball effect. In total I paid $180.00 in overdraft fees last month. Ridiculous, I hate the banks, but what can I do. I like the idea of putting everything, daily expenses, on credit card and paying it weekly though. May look into that..
March 9, 2010 at 5:24 pm
@ Sparky re: “Sandra…I work for a bank so I wouldn’t switch to PC Financial…I believe in the bricks and mortar bank and am willing to pay…”
As a bank employee, isn’t one of your benefits free employee banking?
March 9, 2010 at 5:25 pm
@Maureen, I had to laugh i am like you were! Speeding down the street to the bank. Been doing it off and on for the last 20 years. Crazy, Glad I found Gail’s show to guide me into Financial Sanity!! I don’t know how I ever got into this terrible habit of living “close to the bone” all of the time. I am not even a “shopper” I guess I am not a good planner..I think it’s great you are one month ahead, I think if I put my expenses onto a cc I’d get into more debt..
March 9, 2010 at 5:33 pm
I always had three month’s income overdraft offered by my bank at (about) 9 per cent interest, beyond that at 16, no fees. With this and that (roommates leaving me with 10K renovation costs for the flat, thank you, deadbeats!), it meant that I had a year where I was never in the black and usually close to the limit. As long as there was a steady income, the bank was only too happy to have me pay 2.25 per cent of everything I earned to them. They even sent me a holiday card and I realised that a) I was paying their bonuses[*] and b) I was already living below my means as the overdraft did not grow. Took a whole year of essential-expenses-only to get out of it, and another one to build a safe cushion. I still keep a float of one month’s income in the account. Have gone into overdraft only twice since, both cases of unlucky timing (family emergency and car emergency, had to put 2K cash on the table on short notice, two days before payday). With 9 per cent and no fees, it’s cheap, but the failures in planning still anger me.
[*] The thought that I’m paying for the privilege of being stupid motivates me far more into changing my behaviour than the thought that I’m living on the bank’s money.
March 9, 2010 at 5:45 pm
@Snoopy – What you’re describing is likely a NSF fee. That’s what you pay when an item bounces and you don’t have overdraft protection on your account. On my account I pay $5.00/month if I fall into overdraft – and then interest on top of that.
March 9, 2010 at 6:28 pm
If you already have an Excel spreadsheet and just want to add the feature of colour highlighting balances then they hit certain values do the following:
1. somewhere on your spreadsheet (out of the way at the top or way to the right is usually good) enter the amount that you want as the trigger. For example I want a balance under $1000 to trigger red highlighting. In an adjacent cell I enter $1200, since I want that value to trigger yellow highlighting which warns me I’m getting close to dropping under the threshold for exemption of bank fees. You may have a different purpose for highlighting in mind so pick whatever values work for you.
2. Select the column/row where you want to apply the instruction to do the highlighting.
3. Under the Format menu select Conditional formatting. For my process I set the drop menus of Condition 1 to “Cell value is” “between” and then in the first box clicked the cell with $1200, then in the second box click the cell with $1000. This tells it to look for any amount between 1000 and 1200. Next click the format button and the patterns tab. Select the colour you want for this range.
To add the next condition you may need to click the Add button to get another set of fields. Repeat these steps for the second condition except select “Cell Value Is” “less than” and to complete the third box go click on the cell with $1000. This tells it to look for balances less than $1000. Click on Format and select a different colour to highlight these balances. If you don’t want colour highlighting you can select bolding or italics (on the font tab) or a cell border from the border tab.
4. Click OK to save everything.
Hope that’s clear.
March 9, 2010 at 6:37 pm
@Geoff…indeed some things are free being an employee…but not everything…
March 9, 2010 at 6:49 pm
We have banked with PC Financial for years now, although they don’t have true branches with tellers they are still affiliated with a “Bricks & Mortar” bank CIBC. We pay $4.00 per month for a RBC account to get bank drafts in a pinch and buy US funds on-line other then that I have never paid a single fee.
March 9, 2010 at 7:24 pm
The fees and rates for ODP vary a lot between banks, if you are paying a monthly fee for the privilege you are paying more than you need to. Shop around or ask your bank about other options. I have an account with TD and they have 2 options one which is a monthly fee (I think $3) and the other is no fee but a $5 charge for going into it. I only have the ODP because I keep most of my funds at ING and if I need to transfer funds the timing may not work great (it takes 2 days to transfer the funds and the cheques/payments clear in 1).
To the people who mention having to get out of ODP at least once every x number of days, again that is institution specific. When I lived in BC I had an account at Vancity (CU) and there ODP operated more like an LOC but with a lower limit and a higher interest rate, as long as the interest was paid each month you could be there forever. Not really a good thing, funny for a credit union.
I think the float/buffer plan is good but I have never been able to do that — if I have funds in a daily use account they get spent. I have always had to keep my money in a harder to get at place (ING now), it seems to make me stop and think about spending it – all psychological, but it works.
March 9, 2010 at 7:32 pm
Thanks for that tip Jenn! I have quite the array of spreadsheets that I created, and I’m good at making them do what I want, but I had no idea colour coding was possible! I used to have to check each line carefully to ensure there weren’t any pesky little ‘-’ that slipped by unnoticed… Sweet
Learn something new every day, even those things you think you have mastered!
March 9, 2010 at 8:57 pm
Oh Snoopy! If there is a crazy, stupid or irresponsible thing to have done with our money the Hubster and I have done it. We can really serve as Gail’s perfect bad example. And yet here we sit – debt free, living on cash, with savings and a planned budget – just a few years after starting to watch ‘Til Debt. I still can’t believe it and neither can our families or the Bank. Just start with Gail’s interactive budget – it is easier than you ever thought possible.
It took a looooong time for us to get to the “one month ahead” state in our bank account – we saved nickles and dimes, sold stuff, got a tax refund, worked some overtime – and then all of a sudden we were there. I love it! The banks get NOTHING from me anymore! In Canada we have what are called NSF fees – non-sufficeint funds – which you are charged for every item that you do not have enough money in your account for. Our banks charge about $30-$40 per item as well. I too had some $180 or more bank fees lurking in my past. Overdraft here is kind of like stupidity insurance – you pay a set monthyly fee to your bank and they will cover all your cheques up to a certain amount ($1000) over what you have in your chequing account – but of course they charge you daily interest.
March 9, 2010 at 11:12 pm
I used to live on my overdraft, too, it seemed like forever. The overdraft was $650, and had to be paid totally at least once a month, which was ok, since my 2 weeks pay was about $700. Unfortuneately, I was also living in a fairly expensive area, so I ended up near the limit most of the time. I finally got tired of paying about 20% interest, I consolidated it onto a 11% credit card, and then had it removed. In all the time I had the overdraft, I never went beyond the $650, so I was certain i could do without it, and I have only paid an NSF once in the past two years, so I think it worked. Now, if only I could drop other expenses so easily!
March 10, 2010 at 11:37 am
I have a friend who was telling me how she really didn’t have any money at the moment; she’d gotten herself in a bit of a pickle. She was on a weekend away for a concert and had gone to an ATM to get some cash and when she quickly checked her balance on her printout she saw $900 and some odd dollars. Well, the first thing that came to her mind was, “I have WAY more money than I thought I did! I’m going Shopping!” And shop, she did. She blew a ton of money that weekend, all on stuff she of course didn’t need. Well, turns out there was a minus sign in front of that $900, she was well into overdraft before she even started her spree.
I have a foolproof way to stay out of overdraft: call your bank and tell them you don’t want overdraft on your account!!