Keeping on top of your finances should be a top priority and when you have tighter control over where your money is going and how much you have left in the bank it should improve your chances of enjoying a better financial future.
Here are some suggestions on how to keep on top of your money, including why it is so important to balance your checking account regularly, how to make the most of modern banking facilities such as apps and email alerts, plus some pointers on what to do when your money doesn’t stretch far enough to cover your bills.
Balance the books
One of the best disciplines you can adopt when it comes to successful financial management is to balance your checkbook on a regular basis.
Keeping up to date with your expenditure is very important to your financial wellbeing.
Be sure to record all your checks, deposits, and debit card transactions in your checkbook register as they go through.
You could also set up a simple spreadsheet if you want to keep a running balance as easily as possible and know how much money you have at any one time.
Also, it is a good idea to make sure your records align with your bank statements when they arrive in the post or are delivered to you online.
Always try and maintain a safety reserve
Unexpected bills can quickly wreak havoc with your personal finances, which is why it is a sound strategy to try and keep a buffer of at least a week’s worth of money aside in case you need it in an emergency.
To keep that spare money out of immediate temptation you might want to transfer some money into a savings account with someone like Altana, allowing you the chance to earn some interest on the cash but having access to funds if you need them.
Having some emergency cash in a savings account is always a better idea than resorting to an expensive short-term loan.
Check your finances on the move
Modern banking often means that your checking account can be viewed via an app on your smartphone.
If your bank offers an app that gives you mobile access to your account it is well worth downloading.
Having the app means that you can check your balance in real-time while you are out and about, plus you can even pay bills and review account activity immediately, rather than waiting until a later date to check the state of your finances.
Try to avoid fees
Another persuasive reason for managing your checking account with a high state of diligence is the opportunity to avoid unnecessary banking fees and charges.
If your account balance falls below zero even for just one day, there is a high possibility that your bank will charge you for being overdrawn.
If you know how much is in your account at any one time and what money is going out, it should ensure that you can take action in advance to avoid going into the red and attracting some expensive overdraft fees and penalties.
Agree on an overdraft with your bank
If money is tight and there is a real possibility that you might be overdrawn at some point in the month it would be much better to negotiate overdraft protection than to go below zero without authority.
If your bank honors a check that takes you below zero or bounces it because of insufficient funds, you are going to start incurring some hefty penalties and that can only exacerbate the situation.
Overdraft protection is a line of credit agreed by your bank. It will cost you money to use this facility but not as much as if you become overdrawn without having an arrangement in place.
Make use of your debit card
The problem with writing out checks is that it can take sometimes take a few days for the money to be taken from your account.
This can make it hard to know exactly how you have available to spend. The solution to this problem can be to try and pay as many bills and transactions as possible using your debit card.
The advantage of using your debit card is that the money for each purchase is automatically deducted from your checking account immediately, making it much easier to keep control of your finances.
Use email alerts
Many banks offer a free email alert system to notify you when your balance falls below a specified figure or when there are insufficient funds in your account after certain payments have been presented.
Email alerts are a great way of receiving an early warning about a potential problem and will give you the opportunity to put things right before you incur any extra charges or a payment is returned unpaid.
Sign up for email alerts and use the minimum balance warning system to alert you when your funds are getting low.
Talk to your bank if there is a problem
Many of us experience some sort of financial difficulty at some point in our lives and even if you display a decent level of self-control with your spending there is always the possibility that your money might run out, albeit temporarily.
How you react to that scenario will define how well you manage your finances in general.
It is far better to notify your bank of a potential problem straight away than bury your head in the sand and hope everything sorts itself out.
Always be proactive rather than reactive when it comes to your finances and check every transaction carefully. Get into the habit of checking your balance on a very regular basis and make a realistic financial plan to put you back into the black if you do find yourself straying into the red.
Successfully managing your checking account should be viewed as a key life skill and the more often you do it the better you will get at keeping on top of your money.
