It happens to the best of us from time to time. You have overdrawn your checking account and suddenly get that sinking feeling in the pit of your stomach. How could this have happened? I was so careful! The reality is that you can't change the past, but how quickly you react to rectify the situation can save you some hard earned money.
The obvious recommendation is to have money in savings so you could easily transfer the money over if you overdraw your account, but we live in the real world, where not everyone can be ideally responsible with their money ALL THE TIME. Maybe you are in the midst of paying off student loans, you hospital bill from the birth of your twins, daycare for two, your house and your two cars. You were trying to be careful with your online bank account, but somehow between the sleep deprivation and balancing your account with spit-up in your hair, you made a mistake and now you have a negative balance of $500. What do you do? For once, I have an answer that took less than 15 minutes and will save me over $100 in bank overdraft charges!
The obvious recommendation is to have money in savings so you could easily transfer the money over if you overdraw your account, but we live in the real world, where not everyone can be ideally responsible with their money ALL THE TIME. Maybe you are in the midst of paying off student loans, you hospital bill from the birth of your twins, daycare for two, your house and your two cars. You were trying to be careful with your online bank account, but somehow between the sleep deprivation and balancing your account with spit-up in your hair, you made a mistake and now you have a negative balance of $500. What do you do? For once, I have an answer that took less than 15 minutes and will save me over $100 in bank overdraft charges!
Step 1
The most important step for me was to actually realize that an overdraft had been made. I started using Mint.com several months ago and now get a text message if my checking account balance gets too low. If I had not been notified by Mint.com, it would have been 2-3 days before I had been notified via snail mail by my bank about the overdraft. Other options are to have a bank that notifies you of account balances via text or e-mail, but since the bank makes a profit off additional overdraft charges, I trust Mint.com to notify me in a more timely manner.
The budgeting component of this website & mobile app is also excellent at helping us realize where we might be overspending and gives excellent suggestions on financial topics such as IRAs, credit card with high rewards for the areas you spend more in, and of course it recommends putting more into a savings account... unfortunately a step that I had not yet completed.
The most important step for me was to actually realize that an overdraft had been made. I started using Mint.com several months ago and now get a text message if my checking account balance gets too low. If I had not been notified by Mint.com, it would have been 2-3 days before I had been notified via snail mail by my bank about the overdraft. Other options are to have a bank that notifies you of account balances via text or e-mail, but since the bank makes a profit off additional overdraft charges, I trust Mint.com to notify me in a more timely manner.
The budgeting component of this website & mobile app is also excellent at helping us realize where we might be overspending and gives excellent suggestions on financial topics such as IRAs, credit card with high rewards for the areas you spend more in, and of course it recommends putting more into a savings account... unfortunately a step that I had not yet completed.
Step 2
I would love to take credit for this next part, but it was my husbands idea that saved the day. He recommended that I sign up for a Google Wallet account. My husband already had one, but was struggling getting our bank account attached to the account on his phone. It had to do with security questions from my bank, but I was easily able to get the account attached to my Google Wallet on a PC.
Step 3
Attach a credit card and your bank/checking account to your Google Wallet account. Transfer money from your credit card to the Google Wallet. It charged me $21.75 for a transfer of $1000 (a rate of 2.175% - pretty reasonable if you ask me). Then transfer the money from your Google Wallet to your bank account. I was able to perform all of step 3 using my smart phone.
Step 4
The transfer occurred on a Friday night in my situation, and did not immediately appear on my bank website as it would need to be reviewed and approved by my bank. I saw an overdraft charge appear on my account first thing Saturday morning. I had read online that if you transfer money back into your account within 24 hours of an overdraft that many financial institutions will reverse the overdraft charge, so I called my bank and asked (nicely) if they would since I had made the transfer last evening as soon as I noticed the mistake. Luckily for me, they agreed to remove the $33 fee!
Overview
Without the use of recent technology, I would have been charged $165 in overdraft fees for the initial overdraft plus 4 additional bills that were scheduled to be paid before our next automatic payroll deposit. Now, I will be responsible for $21.75 plus any interest I accrue on the credit card that I used which will be $0 if I am able to pay it off in full in the next month. You also have the option of a credit card with an introductory "no interest for 12 months"deal to allow you to space out any debt while using Mint.com to get yourself back on track and put some money into savings.
I hope you found this tutorial helpful, and hopefully I will never need to do this again, but it's a nice trick to have as backup when life throws me a curve-ball!
I would love to take credit for this next part, but it was my husbands idea that saved the day. He recommended that I sign up for a Google Wallet account. My husband already had one, but was struggling getting our bank account attached to the account on his phone. It had to do with security questions from my bank, but I was easily able to get the account attached to my Google Wallet on a PC.
Step 3
Attach a credit card and your bank/checking account to your Google Wallet account. Transfer money from your credit card to the Google Wallet. It charged me $21.75 for a transfer of $1000 (a rate of 2.175% - pretty reasonable if you ask me). Then transfer the money from your Google Wallet to your bank account. I was able to perform all of step 3 using my smart phone.
Step 4
The transfer occurred on a Friday night in my situation, and did not immediately appear on my bank website as it would need to be reviewed and approved by my bank. I saw an overdraft charge appear on my account first thing Saturday morning. I had read online that if you transfer money back into your account within 24 hours of an overdraft that many financial institutions will reverse the overdraft charge, so I called my bank and asked (nicely) if they would since I had made the transfer last evening as soon as I noticed the mistake. Luckily for me, they agreed to remove the $33 fee!
Overview
Without the use of recent technology, I would have been charged $165 in overdraft fees for the initial overdraft plus 4 additional bills that were scheduled to be paid before our next automatic payroll deposit. Now, I will be responsible for $21.75 plus any interest I accrue on the credit card that I used which will be $0 if I am able to pay it off in full in the next month. You also have the option of a credit card with an introductory "no interest for 12 months"deal to allow you to space out any debt while using Mint.com to get yourself back on track and put some money into savings.
I hope you found this tutorial helpful, and hopefully I will never need to do this again, but it's a nice trick to have as backup when life throws me a curve-ball!