How I (almost) overdrafted our checking account

by Erika Torres

This one should go down as “How being too responsible can cause you to overdraft your checking account.”

Since starting the new job, I can’t do a variety of things I used to do at my old job: such as writing up posts, reading blogs, doing my grocery shopping and running errands during my lunch hour, and most importantly–managing our budget.

I guess that’s what happens when you have a real job.

My color-coded budget notebook has been sorely lacking this month. I haven’t tracked a single purchase in more than three weeks and have relied entirely on my online banking system.

And this was my mistake. Letting the online banking system manage our budget.

After all the necessary bills have been paid, I try and keep our checking account below $500 through each paycheck cycle (with the surplus going into our ING Direct online-only savings account). My thinking is if we don’t have a lot of money in the bank, we won’t spend it. Out of sight, out of mind.

Well, a few days after I had paid all our bills, I logged online to see that there was no record of my American Express Bill payment. Had I paid it? Did I forget to pay it?

I had written it down as if I had paid it, but I couldn’t find it in the “pending transactions” or in the “recently paid” section. I checked our American Express card online as well, and there was no record of a payment.

Granted, this bill wasn’t due for another couple of weeks, but I like to pay off my cards asap so I don’t have those extra bills hanging over my head. And we were still hovering around $400, so I decided to schedule the payment.

Of course, the next day, the little focker decides to show up and with all it’s glory, there it is. Two scheduled payments for the same credit card in the “processing” section of our online banking, meaning we had overdrafted our account by $150.

I wanted to cry. I have never overdrafted in my life, EVER. Of course, my wonderful husband took this as the opportunity to rub it in my face–how could I possibly mismanage our budget in this way? How could I be sooo responsible to pay a bill twice?! (he was kidding, of course).

In my head, I was drafting up my angry yet polite phone call that I would be making to Bank of America the next day if they charged us a hefty $35 overdraft fee. It went something like: Your freakin’ online banking system sucks! If I had a scheduled payment and it hadn’t gone through yet, it should either be in the pending section, or recently processed transactions section! It shouldn’t just freakin’ disappear!

But of course, I probably would have been nicer since I am a firm believer you attract more flies with honey.

In the end, we literally got saved by my first paycheck from my new job. It was deposited the same day that the extra bill was “processing” so we never got fined.

Let this be a lesson to all of you uber-responsible freaks like me–track your own finances and don’t always depend on your online banking system.

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Grace January 18, 2011 - 9:40 pm

I am guilty of only using my online bank account to track my money. I was using Mint regularly for a while but then I got lazy. Now that I am in school and living on loans there is less to track but this might be the best time to start getting in the habit.

jason @ second chance checking offers January 18, 2011 - 10:58 am

It’s unfortunate that banks are so quick to charge an overdraft fee. If it’s your first time you can usually have it reversed though. Also, banks are known to calculate customers overdraft fees into their revenue and profits.

Point is, the money they make off overdraft fees are good for the bank’s bottom line at the end of the quarter.

Jasmine L. January 6, 2011 - 3:16 pm

I totally had to laugh at the beginning of this post because that’s exactly what I do at work – manage our budget!

IntrigueMe January 3, 2011 - 9:27 pm

Well the good news is that you’re now a payment ahead on your AE card!! It’s better to over-pay than to under-pay! lol

City Girl January 1, 2011 - 5:30 pm

I still remember the first day that I accidentally overdrafted my checking account. I felt mortified!

I only pay a few bills through automatic payments so I have more control over my account. I never want that accident to happen again. xoxo

Sonya December 29, 2010 - 5:08 pm

I’ve had problems with theirs before too! I had an ex who used the online system to keep track and then kept overdrafting which came out of the savings account at a $100 a pop! I was not happy!

I quit their bank when they didn’t process a check correctly which put a hold on the money that had already cleared the bank and then proceeded to charge me for 4 or 5 overdrafts. I was NOT a happy camper!

Sara @ House Bella December 29, 2010 - 12:38 pm

I’m lucky to have few bills, and do I most of them through bill pay at my bank (though not my credit card – if I have a balance I pay it through my credit card’s pay system). But, I do use Quicken to track all my expenses, set my budget, compare my numbers, etc. Unfortunately I bank at a local bank so it doesn’t auto update – I have to download from my online banking then upload into Quicken – but it still works well!

Teacher Girl December 29, 2010 - 9:28 am

Oh man, as I sit here with only $40 in my checking account until Friday, I can totally relate. I rely on online banking solely which was a problem this week when Terminix decided to “atutomatically” deduct my quarterly payment without any notification. Man, I need to keep better track of these things but sometimes it is so hard, time consuming, and stressful to think about money all the time. *sigh* I am really glad you didn’t overdraft your account though!

Jolene December 29, 2010 - 7:33 am

Wow, good for you…I HAVE overdrafted a few times too many this year 🙁 But thank God for overdraft protection, I guess. I HATE when I double pay a bill by accident!!

Red December 29, 2010 - 7:10 am

Ha! I was just saying yesterday that I hate that period of 12 – 24 hours when a “pending” transaction disappears without a trace only to post later. I guess I’m just obsessive about tracking my payments to debt, so I noticed that it does disappear from my pending for at least 12 hours before it posts.

Just keep that in mind next time. If you’re *almost* certain you made a payment, give it at least a day before scheduling another payment. If it doesn’t show up after a day, you’ll be safe to pay again.

Also, I’m not sure if they charged you the overdraft fee or not, but you can usually talk to a bank representative and convince them to waive an overdraft fee, especially if it’s your first time. I did that when I was 20. I had made a payment to my electricity bill on a Friday, and my check was supposed to go in that same day. But Suntrust pulled the money out before putting my check in (GRRRRRRRRRR!), so I overdrafted. They waived the fee for me.

nysoonergirl December 29, 2010 - 7:09 am

As a former bank teller, I can’t stress enough that YOU and only YOU know what’s going on in your account! And if you think your online account is off, try the ATM… That thing is never, ever right! This is even more true if you use checks. The bank doesn’t know what check you wrote until they receive it… Which could be right after you checked your balance, thought you had more than you did and went on a shopping trip.

But then again, I’m the girl with the highlighted bill calendar… Clearly, I’m a bit anal with my finances!

Jessica December 29, 2010 - 6:48 am

Oh my gosh, I have done the EXACT same thing before! I have a notebook that is my Money Bible that I keep track of all our bills, when I paid them, I take notes, I highlight, and i even color-code too! Too funny that you are the same way! I double-paid my car payment the same month I moved from my small hometown to the “big city” so I was totally overdrawn!!! I’m glad everything worked out for you!!!

prettylittlereckless December 28, 2010 - 10:33 pm

I totally suck at managing my accts. I solely rely on online banking, mostly because I have auto-pays lined up and I never know when they come out. Well, I generally do. But I think it’s because I only have to worry about myself and no one else financially. My goal though it to be far more financially responsible in 2011. Living within my means and not spending on my CC because I want something.

You rock for being so responsible!


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