Financial Literacy Month: Ignorance is Not Bliss

Financial Literacy Month (1)


April is Financial Literacy Month, yay! Well, I suppose every month is financial literacy month here at feelgoodfinances…Anyway, though I’m late to the game, every day this month I’ll be bringing you useful information to help you start or continue your financial journey.

Today’s topic will be “Ignorance is not bliss”:

When it comes to finance, there are many times when what you don’t know can actually hurt you. And this can be something as simple as not knowing your bank account balance. When I was a sophomore in college, I didn’t think it was a big deal if I didn’t know how much I had available to spend in my checking account. I knew I was broke, so why wasn’t that good enough?┬áIt wasn’t good enough because I had to write a check for rent but didn’t bother to look and see if it would clear. I just wrote it and tip toed away hoping for the best. When my mom called to sass me about my account being in the negative and how I need to be more responsible, I did some thinking and I came away with two very important lessons:

Overdraft protection is both a blessing and a curse. If you have bills or important obligations that must be paid with a specific account with this enabled, have no fear they will be paid even if your account is not sufficiently funded. But you will pay for big time with those dang overdraft fees. Typically you have the option to disable overdraft protection, but then you run the risk of having checks bounce and your debit card getting declined when making a purchase. Weigh your options and see what feels most comfortable for you.

So, how do I keep my track of my actual account balance since checks don’t post in real time like when I use my debit card? I could keep meticulous records after each purchase and for future transactions, but let’s be real. College was hard enough with 17 units, a job, an internship, and learning to adult…that wasn’t going to be practical for me. So I came up with another idea:

A check writing account! I opened a checking and savings account at the local credit union, and dedicated it to specifically writing checks. So every month I would transfer the money for rent over to my check writing account, write the check so I drop it off at the office and voila! No more stress over check writing. And to this day, I still use this strategy and I haven’t had an overdraft fee since then.

Now that they average bank or credit union has a mobile app, and options to schedule transfers in advance it makes managing money even simpler.

What kinds of things have you done to make overdraft fees a thing of the past? Comment below or tweet me with your ideas!


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