How To Create A Healthy Checking Account
I don’t know about you, but I just hate it when I overdraft. There’s the drama, the fees, and the disappointment in myself that I spent too much money. But I haven’t overdrafted in years. I found a new way of handling my checking account. Perhaps you’ve already read my article on how to never overdraft again, but need more
Benefits of a Healthy Checking Account
There are some great tips in there, but today I’d like to discuss a broader topic: how to have a healthy checking account. Having a healthy and well-funded checking account is the key to:
- Ensuring you never overdraft.
- Ensuring that you have enough money stored up for unexpected emergencies.
- Ensuring transfers of money in and out of your account don’t have to be on paydays.
Creating a Healthy Checking Account
There are a few basic steps to bring your checking account from the hundreds to the thousands. Let’s discuss these steps in detail:
- Make a budget. There are several ways that you can make a budget, but just make sure that you do it! It’s the key to living debt free and ensuring that you don’t overspend and go into debt – and that your checking account stays properly funded.
- Store part of your savings in your checking. Have some savings built up? Transfer some of that over to your checking to ensure you don’t overdraft. For many, $1,000 to $2,000 will be sufficient to ensure an overdraft doesn’t occur. Remember, it is very likely that your checking account has the same protections against fraud as your savings account. Plus, if you use eBillme for your online shopping you’re sure to help protect yourself against transaction fraud.
- Don’t auto-pay bills you’ll forget about. One of the major downfalls in a financial plan can be the auto-payment of your bills. For those bills you frequently forget about, keep a note on your calendar to pay reoccurring bills several days or a week ahead of time.
- Check your account often. It’s always a good idea to know how much is in your checking account. We currently reconcile our transactions once a week but check the account every 1 to 2 days. Every family will be different, but whatever you do, don’t just check it once a month! You’ll find yourself wondering where your money went and won’t find nearly as many ways to improve your finances.
What does it feel like to have a healthy checking account?
I can’t even begin to describe the peace that can be felt when you have a stable checking account. Perhaps you’ve had trouble sleeping at night, arguments with your spouse, or can’t seem to focus on your work. When you have a healthy checking account, many of those problems seem to just melt away.
It’s truly incredible how many difficult situations can be traced back to personal finance. Whatever you’re going through, ask yourself how large of a role money is playing in your problem. You might be surprised with what you come up with.
Try this: make a list of the top three things that are weighing on your mind. What are they? Write them down on a piece of paper. Now, how many of those things are related to your finances being out of balance? This is a great way to find out how many of your troubles are due to poorly managed finances.
Some last thoughts . . .
If you’re ready to change everything about the way you do finances, you’re going to need to make a budget and pay careful attention to your financial situation. But you can’t do it alone. If you’re married, get your spouse on board. If you’re single, find someone to hold you accountable. You can do it. Just don’t do it alone!
Looking for budget friendly family activities? Check out Camping: What to buy and what to borrow.
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