Write it down. Despite the ability to log in to my checking account from virtually anywhere, I still maintain a written record of all transactions in my account. First of all, it helps me avoid overspending. Some merchants take a couple extra days to post a debit, so the balance may be inflated on any given day. But maintaining my checkbook register also serves as an adequate reference for more practical purposes such as remembering how much I donated to my favorite charities the year before or what to budget for winter heating bills based on the previous year’s bills.
Don’t float it. I learned the hard way how the newer policy on “floating debits” instituted by most banks works. There was a time when you had a couple days before a transaction posted to get the money in your account, but those days are no more. When money was tight, I would sometimes begin spending my Friday paycheck on Thursdays, knowing that by the time the debit posted to my account my paycheck would be there to cover it.
However, the last time I did this (and I’ll never do it again!) the Thursday debit was held by my bank, and the five outstanding charges from earlier in the week posted overnight, causing an overdraft with each post. With overdraft fees in excess of $30 per item, I ended up paying more than $300 to my bank, even though the money from my paycheck was there by the time the original debit posted. Remember that when you run your debit card through the terminal at the store, you MUST consider the money spent. Likewise, when you write a check, most merchants are now converting the check to an electronic debit right there at the cash register.
Don’t forget automatic payments. Another reason that I write everything down in my checkbook register is that I have several payments that automatically come out of my account on pre-determined dates. These payments typically post at the end of the scheduled date, so if you log in to check your balance on the same day that a payment is scheduled, you may accidentally overspend and end up with another hefty overdraft fee. I’m a big fan of making bill payments automatic so that I don’t have to worry about late fees, but it does require a little diligence to make sure I account for the payments each month.
Use the "Log Out" button. It’s easy to flip to the next Web site after checking your bank balance by just typing a new web address in the browser. However, this may not serve as an adequate safeguard against identity theft or data security. This is especially important when using a public computer. Even if you are the only person who ever uses your computer, do not take the chance that your sensitive banking data could be fraudulently accessed by not actively logging out. I have not heard of anyone having this problem before, but why take the chance?
Online banking can save you time and even money with its convenience and ease of transferring money from one account to another. Just try to avoid contributing to your bank’s bottom line with fees by following these tips and keeping your finances in good order.