Online banking and smartphone apps have made it easy to check your available balance. But, is that an accurate reflection of how much money you actually have? It wasn’t that long ago that everyone balanced their chequebook. Credits and withdrawals were examined regularly, receipts were recorded, and cheques were registered. Now, some people have never tracked their finances at that level. And that can lead to trouble. If you don’t KNOW how much money you actually have, here’s why you should find out.
Many banks offer overdraft coverage as if they are doing you a favour. They advertise it as a layer of security, and as a convenience for you. However, the second you cross into overdraft territory, they tack on overdraft fees. And you aren’t charged just once. Every time you spend money at a new location, a new charge magically appears. Sometimes, you can have a few charges register before you even realize you went over.
Most people assume that every time they use their debit card that the funds are automatically removed from their account at that specific moment. However, this is not always true. Some transactions process immediately, but others may be delayed. Often, this depends on how the retailer is set to transmit the data. If they don’t transmit every purchase immediately, your online balance may not be accurate. By staying on top of how much money you have actually spent, you can avoid spending you don’t have. Therefore, you will avoid these aggressive overdraft fees.
Having a card purchase declined can be embarrassing, and inconvenient. Whether you are in line with an armload of groceries, looking to purchase some petrol, or need to pay your restaurant tab before you leave, coming up short can cause problems. While a restaurant may not have you arrested for an honest mistake, you are at their mercy. At a store, you will be forced to leave your purchase behind.
All of this can be avoided by properly tracking your bank balance.
Bounced Cheque Fees
In some cases, a retailer will charge a fee if a cheque fails to clear. The cheque clearing system can take a few days to complete. This means, that a cheque you write today may not result in an actual payment until a few business days later. If you do not account for these funds, and continue spending money based on the balance you believe you have, your cheque may not clear. Not only can this lead to a charge by the retailer, it may prevent you from being able to write cheques there again. And, if the bank does honour the cheque, you will likely be charged an overdraft fee.
Know Your Balance, Avoid the Pain
All of the aforementioned hardships can be avoided by simply tracking your spending. It will also help you stay aware of your spending habits, and could help you budget more effectively. Instead of relying solely on your mobile app or online bank account, take the time to track what you spend. It can save you a world of trouble.