How to Use Internet Banking to Stop Giving Your Bank Free Money

It is time to use internet banking to keep a close eye on your finances. Have you found yourself making purchases thinking you have money in the bank only to find out that you don't? Perhaps you made the mortgage payment and it was returned due to insufficient funds. Are you coming home and finding those small "Thank You" looking note cards from your bank waiting on you? Well, it’s because the bank is “stacking” your checking account charges. The banks have decided to pay all large debits first. This process called "stacking", means they shuffle the charges around and place the largest amounts on the top to be paid first. So, let us say I have 100 dollars in my checking account. I make four 25 dollar purchases. I have totally forgotten about the 80.00 dollar automatic debit I authorized for car insurance and it comes through the day after I made the four 25 dollar purchases. That means my account now have 180 dollars being requested for payment out of my checking account which only have a balance of 100.00 dollars. About a week later, I will get one of those little "thank you" looking note cards from my bank listing my four 25 dollar purchases along with a 35 dollar insufficient fund (NSF) fee next to each one. Therefore, where I would normally have paid one 35 dollar NSF fee for the 80 dollars that was not in the account, I will end up paying a total of four 35 dollars (four NSF fees) plus the four 25 dollars that wasn't in the account. My forgetfulness just cost me 240 dollars instead of 115 dollars, all because the banks have decided to stack my checking account charges and pay all large purchases first instead of paying them in the order they occurred. Has this happened to you? Read on and I’m going to tell you how to use internet banking to stop giving your bank free money.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Checkbook
• Checkbook Registry
• Pen
• Calculator

1. The first step to getting rid of those little "Thank You for not having enough money" cards from your bank is to balance your checkbook and stop over spending. So, check your checking account balance and write the amount of money available in the account in the "balance" column of your check book registry. This is usually the last column in the registry. If you are like me and spends half your day on the computer, it is easy to take a few minutes to log on to your online checking account to see what your balance is, what funds have cleared and how much is left. Now, I know we have become very high-tech so apply these same steps to your PDA, blackberry or other accounting media for tracking and managing your personal finance. If you want to balance your check and keep up with expenditures online; try finding a service that allows that such as clearcheckbook.com might be more useful to you.
2. For each automatic debit that is scheduled to be deducted from your checking account per pay period, enter the amount into the checkbook registry and subtract it from the balance. For example, many people set their mortgage payment up as an automatic debit. Enter that amount in your checkbook. The average person who ends up with a negative checking account balance do so because they forgot about an automatic debit that was authorized months (some time years) ago. I try to stay away from granting creditors automatic debit privileges. However, you need to maintain a registry to keep an accounting of your available cash.
3. For all charges made, be it by check, virtual (online) or ATM card, immediately record it into the checkbook registry and deduct it from the balance in your checkbook registry. Even if it's just a soda pop from the vending machine. If you use your ATM Debit Card or wrote a check, remember to enter that in the registry and subtract it from the balance.
4. Always refer to your balance before making a purchase. If you don't have the money in the account, don't make the purchase. It is imperative to stop making purchases once your checkbook registry balance indicates no more funds are available.
5. If you check your balance and spend only the amount of monies available, the little "thank you" size note cards from the bank telling you how much of your money they are taking in NSF fees will go away. Even if the card doesn't have "Thank You" written on it, I can assure you that the bank THANKS YOU for all of that free money you're throwing their way.
6. If you knowingly exceeds your checking account balance, consider minimizing the damage. For example, with a balance of 100 dollars in my checking account, I could make five 25 dollar purchases. There is no amount larger than the 25 therefore when the bank stacks my charges, only one 25 dollar will show up for NSF. I could make four 25 dollar purchases and one 15 dollar purchase and using their stacking system, the four 25 dollar purchases will be paid first still leaving me with only one debit with NSF fees. In my opinion, paying NSF fees is wasting money and I wholeheartedly discourage it. However, I realize people end up in a financial crunch and over spending occurs. Try not to make it a habit or way of life.
7. Consider borrowing from a friend or family member. If you find yourself needing a few dollars for an emergency you've been unable to save for, like car repair or gas, try to borrow from a family member or friend (the key word here is 'borrow' as in pay it back!). You should consider this option especially when the NSF fees are going to surpass the amount you wanted to borrow. If you only need 80 dollars, does it really make sense to pay the bank 140 dollars for not having it when you could have gotten it from a friend or family member? Or even a pawn shop if you have items in the garage you're not using anymore? Better yet, work at home making money online writing articles for EHOW. The extra money from your home-based business will help with those emergencies that tend to pop up.

Tips & Warnings

• The best and most prudent way to handle the banks stacking checking account charges is to never spend more money than what you have in the bank. Each time that you overspend and the bank charge NSF fees, you are giving the bank free money, hence the facetious "thank you" looking note cards in your mailbox.
• Look at your bank statement for the past three months and add up all of the NSF fees. Now imagine what you could have done with that money.
• Stop the little "thank you" looking note cards from coming to your house. Stop giving the bank free money and use that money to treat yourself. Haven't you earned it?
• Be aware that if you do not control the checking account "stacking" system that banks have implemented, you could find yourself in a black hole of debt struggling with no end in sight. From experience, I can tell you that it quickly becomes a vicious cycle and the only way to get off of this roller coaster and downward spiral is to stop spending money you do not have in the account.