Loans By Kathy: Every Household Should Have a Budget - Checking Account

Every Household Should Have a Budget - Checking Account

Every Household Should Have a Budget continues with tips on how to handle your checking account.  Here is my first question, do you balance your checking account?  I am disappointed to say that when I ask my clients this question more often than not I get the answer, "no".

Here is the problem with not balancing your checkbook.  You will never catch any errors and the possibility of being overdrawn greatly increases.   I have seen another trend when it comes to spending with NSF (Non-Sufficient Funds) fees charged by the bank.  Some banks are charging as much as $35 for each occurrence.  It doesn't matter if your account is short by $.05, it is going to cost you $35.

Last year I had a client tell me he couldn't save money.  With that statement I knew we were in for some hard conversations.  He sent me his documents, and sure enough he had incurred $3500 in NSF charges!!  There was his savings/down payment!!

To balance your checkbook, you need to take your monthly statement and compare it to the checks you have written and the charges you have made if using a debit card.  I suggest logging all debit card expenses in a journal.  It will make it easier to complete this task.

Staying on top of your checking account will give you control over your money.

 

Every Household Should Have a Budget - Getting Started

Every Household Should Have a Budget - Step 2

Every Household Should Have a Budget - Savings

 

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Kathy Sheehan Senior Loan Officer

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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.

 

Comment balloon 11 commentsKathy Sheehan • August 17 2013 07:08AM

Comments

How can an adult, or anyone for that matter, not balance their checkbook?! That drives me crazy. Not knowing exactly how much money you have is just asking for trouble.

Posted by Suzanne Otto, Your Montgomery County PA home stager (Six Twenty Designs) almost 5 years ago

Kathy- Balancing your check is a must for keeping control over one's finances. It must be done EVERY month!

Posted by Donna Foerster, Metro Denver Real Estate Agent (HomeSmart Realty Group) almost 5 years ago

Hi Kathy -- YIKES - $3500 in NSF charges!

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) almost 5 years ago

I think I am the only one I know of, besides my Mom, that still balances their check book.  

Posted by Chris Ann Cleland, Associate Broker, Bristow, VA (Long and Foster REALTORS®, Gainesville, VA) almost 5 years ago

Suzanne, that is a mystery to me too!

Donna, agreed!

Michael, that is what I said too!

Chris Ann, I always balance my checking account.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 5 years ago

Great advice, Kathy.  There is no real excuse for allowing yourself to be charged for useless bank fees.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 5 years ago

Gabe, I agree with you.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 5 years ago

Kathy, those fees. It's incredible that for as little as a penny you can get charged. It's really annoying to see that because of so little, you lose so much in the long run.

Posted by Phil Stevenson, CRMP, Reverse Mortgage Expert in Miami and Florida (PS Financial Services 305-791-4874 or 888-845-6630) almost 5 years ago

Phil, that is absolutely true.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 5 years ago

Those bounce protection fees will KILL you! One suggestion I would offer would be to find a credit union you qualify for. The smaller, more intimate setting often gives you a little more "negotiating" power should you find yourself needing to dispute an overdraft fee. My CU actually has a $500 credit card attached to my account where anything that overdrafts go without any additional fee (besides the interest).

Posted by Paul Collier, Paul Collier (Patriot Home Mortgage) almost 5 years ago

Paul, I agree with you.  As I said one client had $3500 in NSF charges...

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 5 years ago

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