A $40 Billion Piece of Advice: Don’t Spend What You Don’t Have
Americans paid nearly $40 billion last year in overdraft fees. Meaning, they overdrew their checking accounts via bounced checks, debit card transactions, or too many trips to the ATM, and paid 40 billion for doing so. $33.3 billion to banks and an additional $6.2 billion to credit unions on 1.12 billion overdrawn transactions to be exact.
This is an example of how bad financial habits keep people broke.
Bank critics and lovers of the nanny state are calling for more regulations on the banking industry. I offer a simpler solution: Stop spending money you don’t have!
America, here is how you can save $40 billion:
Learn to balance your checkbook. When you write a check, record it, deduct it, and the result is how much money you have.
- “How last century,” you’re saying. “I don’t even use a checkbook, Mr. Mason. I’m totally an online banker.” Great. You have even less excuse for being overdrawn, because with a quick glimpse at your phone, you know how much money you have in your account.
- Stop swiping your debit card and start paying cash. Yes, cash, also very “last century technology.” The beauty of cash — you can’t overdraw it.
- Now you’re saying, “But to get cash I have to go to the ATM where I might overdraw my account.” The only thing more annoying to me than people who never have cash, are people who have to run to the ATM every time they need a $20 bill. Try this, now that we’ve refreshed ourselves on checkbook balancing: write yourself a check once per week, for an amount less than you have in your account, and use that as your weekly allowance.
Overdrawing your account means you’re financially irresponsible. Period. And if your bank requires you to pay an annual fee for overdraft protection, it’s time to change banks. Because when you stop spending money you don’t have, you don’t need expensive overdraft coverage!
Damian Mason speaks, writes, and educates on the subjects of Business and Agriculture. He carries cash, although he hasn’t used an ATM in 2 decades. www.damianmason.com