Stupid Tax: Overdraft Fees Redux
April 6th, 2008 by Ana
I am about to pay some more stupid tax. It was less than two months ago I paid overdraft fees, and swore I would do better. So much for good intentions - my account went negative Friday afternoon.
It took me a while to figure out how this happened this time around. I finally worked the math with a calculator and discovered my balance and what I thought was my balance are almost exactly $100 off each other, so this means I made a simple math error in the hundreds column. Yes, I typically do the math in my head from habit and the desire to keep what few brain cells I have left well exercised.
This is downright embarassing. I’ve been doing simple math in my head for a couple decades at least, and for some reason when I make a bank-related math error it always shows up in the hundreds column. Why couldn’t I make a mistake on the RIGHT side of the decimal place? Maybe I am getting old and need to start using a calculator.
Since it has only been two months since my last “oopsie” I don’t think I will be able to beg for mercy at the bank again. There is also the pride factor, and my pride is now officially damaged with this latest mistake.
There is a very good reason this kind of mistake is called “stupid tax.” I truly feel stupid and incompetent here. I’m a grown woman, in college even, and have just overdrawn my account for the second time this year. UGH! It hurts even more to know I went from a balance of over $1400 to a negative $90 in one day.
Hubby hasn’t been nearly as hard on me as I am being on myself. He simply suggested waiting for the dust to settle in the beginning of the month before I start moving money around. Just about all the bills for this account come out in the first week of the month, so he thinks I should just sit back and let the deductions go through before doing anything else. I think hubby has a very wise suggestion here … along with his comment that I am still human and still doing a “good job” managing the household money.
I still feel incredibly stupid right now.
I also am not sure just how much this will cost me. The account went negative Friday afternoon, after they were done posting deposits, not that it would have saved me since I didn’t discover it until yesterday afternoon as hubby and I sat down to go over the monthly budget and money and goals. I dropped off my hourly check in the night deposit box, but it’s common practice for banks to run the deductions before running deposits … and Friday I filled the Pizza Taxi before work then yesterday we had the oil changed in both vehicles since I honestly thought I still had enough in the account to cover that. This could get ugly … but I won’t know until tomorrow.
Posted in stupid tax |
April 6th, 2008 at 10:41 am
I know I’m not going to convince you to use a budgeting spreadsheet versus your whiteboard
but I second your hubby’s suggestion of waiting for the dust to settle before making the big moves. I know it is tempting to get all that money socked away ASAP but the week’s worth of interest you gain is not going to cover the potential overdrafts from a miscalculation.
:hugs:
April 6th, 2008 at 10:42 am
I am just glad that I am not the only one who beats themself up over paying a stupid tax. I swear I am trying to leave an extra hundred dollars in my checking account just to cover unexpected withdrawals or delays in getting a deposit credited. My bank can take FOREVER (deposits made after 2 on Friday may not show up until Tuesday) to post a deposit, all the while happily charging me overdraft fees.
April 6th, 2008 at 10:55 am
PaidTwice: it wasn’t about the interest, it was about *HAVING* it in there for me. It felt so good to see that balance in the EF go up that far.
Cindy: Don’t say that too loudly!!! I sure don’t want my bank getting any ideas…!
April 6th, 2008 at 11:33 am
2 Suggestions to avoid this in the future =)
Either use a rewards credit card for everything, and pay the bills off every month. That way if you go a bit over, you can take the little bit off of your savings and you can still use your head to monitor things.
Or open up a savings account at the same bank, put a not insignificant amount in there, and use their overdraft protection. At my bank, that’s free, not sure if you mentioned how much it is at your bank.
I do both options. Every automatic payment comes out of the credit card because I know around how much that is every month and know that I can cover it from my paycheck when the credit card bill comes due.
April 6th, 2008 at 12:17 pm
Put your baby emergency fund in your checking account. Don’t include it in your available balance. That will give you built in overdraft protection.
April 6th, 2008 at 1:44 pm
Stupid tax partially and dealing with a company that just wants to rip you off if they possibly can. It is ridicules how poorly banks treat “customers.” Credit Unions will often offer some form of overdraft protection (without huge fees - though often with some). They can vary from transferring money from your savings account, covering your check because they understand you have a long history with them (sometimes with direct deposit of your paycheck they know the money will be there soon), charging your credit card… Some banks will to but credit unions are much more likely to proactively help you where banks will often try to get as many fees as possible even if they will offer protection from some fees if you can figure out how to activate them.
April 6th, 2008 at 2:41 pm
Ugh. *hugs* When I had checking and savings at the same bank, they set it up as overdraft protection. I never needed it, but it was nice.
April 6th, 2008 at 3:03 pm
This happened to me a while back and it sent me into orbit! Being the ultra-frugal person I am, paying $35 for an overdraft fee is about like pouring $35 down a drain.
April 6th, 2008 at 5:08 pm
A very close relative of ours was having a difficult time with overdraft fees. Over $2,400 + in overdraft fees. But, once they got on the envelope system via Crown Financial they didn’t have that problem anymore.
Give Crown a try. http://www.crown.org
April 6th, 2008 at 6:57 pm
She doesn’t need to give Crown a try. She’s a Ramsey follower and understands the envelope system.
April 6th, 2008 at 7:20 pm
this is why i like USBank and their online system.
If i’ve discovered I screwed up I can transfer the money pretty quick and have it covered.
Just a sugestion Ana: Don’t start throwing money into the savings account till you have a $500 - $1000 cushion in checking for such times.
I’ve bounced one check in 10 years, and that was due to mass stupidity on my part.
I know you want to have the money in savings but day to day operating expenses need to be covered.
The only bad part about this idea is that it’s easy to say, “Hey I got $500 in the account I can go nuts.”
not the best suggestion, but It’s been working for us.
April 7th, 2008 at 2:48 am
I believe you’re incorrect in your premise that banks do deductions before credits. I’m pretty sure that, by law, they have to credit your account with deposits before doing any deductions.
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April 7th, 2008 at 5:48 am
Oh, what a lousy situation to be in! I did this a couple months back, and I just felt sick waiting for everything to clear and the dust settle so I could see what the damage was. It was even worse knowing I couldn’t do anything to stop what was already set in motion!
April 7th, 2008 at 8:32 am
The same (sort of) thing happened to us a couple of months ago. I had made a transfer deposit on Friday afternoon to buy a new mattress and then bought it on Saturday. The bank (both savings AND checking were at this bank) waited to credit my checking account until Monday afternoon and forced 13 bounced checks. My wife came unglued and went to the bank and demanded that they reverse those charges. Fortunately the bank DID pay them, they just wanted to screw me out of the NSF fees.
The bank balked and my wife said, okay, fine, just close all the accounts. I have 6 months salary in one account, a checking account, a Christmas Club account, three savings accounts for the kids, and my mortgage here. I just paid off a car loan last year at this same bank. Did I mention that I’ve been using this bank for 36 years?
They did reverse the charges when my wife showed them how they were sticking it to us and they apologized. I wasn’t there, but I understand that she was NOT someone the bank wanted to deal with that day!
It never hurts to ask, why not just ask them to reverse the charges?
April 7th, 2008 at 9:11 am
update: so far, no overdraft charges, and they DID credit my deposit first thing! (I am amazed at that) My “available balance” is still showing negative because the deposit was all in checks, so it is “pending.” I do hate this waiting game.
April 7th, 2008 at 9:12 am
I started using software to track our finances. I know that is not everyone’s cup of tea but it does work to cut down on mistakes.
April 7th, 2008 at 9:59 am
[…] the math error and possible overdraft charges […]
April 7th, 2008 at 4:50 pm
Ick. We did this a few months ago, and I was BESIDE myself. DH went in and talked to the branch manager and got some of the fees waived. It was embarrassing, though.
April 11th, 2008 at 11:10 am
My husband is a banker and he suggested you ask a customer service rep at your bank about overdraft protection. Hopefully you won’t need it but if it is there it will protect you from the overdraft fees.
Char