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Insufficient Funds, Again? Four Ways to Make Sure You Don’t Overdraw Your Account

By Helen Reaume

Published February 5, 2019 • 4 Min Read

It happens, life gets busy – but here are four ways you can prevent it from becoming a habit so that you don’t have to worry about missing a payment, overdrawing your account and those annoying service charges.

1. Stay on Top of Your Balance

You don’t need to carry a notebook everywhere to keep track of all your transactions. Checking your balance using mobile banking is as easy as a few taps on your phone. Check it when you’re waiting in the line at the grocery store or log into your online banking account when you’re reading your e-mail. If you know you’re more likely to scroll through Instagram or log onto Facebook the next time you have a few minutes, set up a banking alert instead to let you know when your account balance gets low. That way you can transfer funds from your savings account or wait to make a big purchase until next payday.

2. Use Mobile and Online Banking to Organize Your Payments

Do you feel like juggling your payments is becoming more complicated than juggling the schedule of your 8 year old with five extracurricular activities? Sign up for paperless billing with your service providers. Paperless billing will remind you when a payment is coming up and when your invoice is ready. You may also have the choice to set up your pre-authorized payment dates to the day or week your paycheque gets deposited. You can easily do this using your mobile banking app or contact your utility company.If your payment dates aren’t flexible, set up reminders in your calendar so you know not to overspend.

It’s simple, secure and personalized. Best of all, it helps you keep track of spending and plan for upcoming expenses.

3. Get Rid of Charges

Have you ever heard of grey charges? No, they don’t refer to the cost of things like hair dye. Grey charges are recurring expenses that you set up at some point which you may still be charged for – unbeknownst to you. Comb through your account statement to make sure that money isn’t flowing out for a monthly gym membership you thought stopped over a year ago or a software subscription for a program you never use.

4. Keep Your Account Accurate

Retro might be cool when it comes to clothing trends, but going retro by writing cheques could mess with your bank balance. You’ll have to monitor your account to see when the cheques are cashed so you know your account’s true balance. Instead of giving yourself added work and stress, consider sending an INTERAC e-Transfer® by e-mail or text. The payments will be taken out of your account immediately. This way you’ll know exactly how much cash you have and if you can afford to splurge on an extra-large pizza with all the fixings or just get the small with pepperoni instead.

Using electronic statements or eStatements instead of paper statements are another way to keep track of your money online.

Also, make it a habit to check your statement at least once a month to make sure that it’s accurate and there are no errors. If you find an error, advise your bank as soon as possible.

The future doesn’t have to be paved with insufficient funds and service charges. Life is busy and most people’s finances are complicated. We’ve all accidentally overdrawn our accounts at one time or another, but it’s likely not something you want to get used to doing. It can take a bit of planning, and luckily there are lots of technology solutions to help make it easier to manage your finances.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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Banking/ Digital banking