If you own a checking account, you know that it does not pay to have a lot of money there because it generates very little interest income. In fact, most people put money into CDs, savings accounts or even mutual funds to get a higher pay out. The end result is that there is little money in the checking account.
The problem with having only a little money in the checking account is two fold. First, banks like to charge so-called monthly maintenance fees when the balance is below a threshold. While each month does not incur a great cost, having it deducted month after month for many years is a drain on the account.
Second, low balances increase the chances of an overdraft. This happens when you try to take out too much money via a check or ATM card. THe transaction still goes through but only because the bank steps in and temporarily loans you money. At the end of the month, the bank will demand a high fee. Some banks used to enroll clients automatically causing them great consternation.
In 2010 a strong set of laws was passed by Congress to restrict the activity of banks. Now they can no longer automatically enroll their clients into overdraft programs. While this helps hold down the cost of unreasonable fees, it also means that more people will run into the situation where a check bounces or an ATM card cannot be swiped through.
One can reduce the chances of overdrafts merely be reducing costs. If you possess a job that is considered a low risk, it may save you some money on your health insurance. Some fairly "safe" jobs are teaching and accounting so if you own this sort of job, you may be able to get lower costs on your health insurance. Nevertheless, your month-to-month health care subscription can be daunting.
With respect to cost cutting, another drain on your wallet are energy hungry appliances, due to the electricity they eat up. Most consumer online places will advise you to look into the energy star rating and the power requirements of any appliance you are thinking of buying. Over a year's time, buyers might be able to save quite a bit on electricity costs.
The problem with having only a little money in the checking account is two fold. First, banks like to charge so-called monthly maintenance fees when the balance is below a threshold. While each month does not incur a great cost, having it deducted month after month for many years is a drain on the account.
Second, low balances increase the chances of an overdraft. This happens when you try to take out too much money via a check or ATM card. THe transaction still goes through but only because the bank steps in and temporarily loans you money. At the end of the month, the bank will demand a high fee. Some banks used to enroll clients automatically causing them great consternation.
In 2010 a strong set of laws was passed by Congress to restrict the activity of banks. Now they can no longer automatically enroll their clients into overdraft programs. While this helps hold down the cost of unreasonable fees, it also means that more people will run into the situation where a check bounces or an ATM card cannot be swiped through.
One can reduce the chances of overdrafts merely be reducing costs. If you possess a job that is considered a low risk, it may save you some money on your health insurance. Some fairly "safe" jobs are teaching and accounting so if you own this sort of job, you may be able to get lower costs on your health insurance. Nevertheless, your month-to-month health care subscription can be daunting.
With respect to cost cutting, another drain on your wallet are energy hungry appliances, due to the electricity they eat up. Most consumer online places will advise you to look into the energy star rating and the power requirements of any appliance you are thinking of buying. Over a year's time, buyers might be able to save quite a bit on electricity costs.
About the Author:
The Reader can pick up more information on check book register. Learn more about finance software reviews by directly consulting our website.
No comments:
Post a Comment