It is an unfortunate problem if your bank account goes negative. Constantly drawing money from your account without checking the balance can cause this unexpected issue. Despite this, you shouldn’t worry! If your account drops that low, there are ways to get it back on track. We advise you to do your best not to let your account drop to its lowest. In this article, we will also provide you with ideas that revolve around maintaining your account and keeping it in balance.
If Your Account Turns Negative, What Should You Do?
Here is some helpful advice you should keep in mind if your account gets overdrawn:
- Ask about your bank’s overdraft fees
- Keep the account unused
- Understand the situation
- Continue saving until you’re no longer in the negatives
- Contact your bank
- Prevent the negatives from happening
Ask About Your Bank’s Overdraft Fees
You should always try to look into the situation when your account gets overdrawn. For this reason, you should always ask about your bank’s overdraft fees. Most banks charge this fee when they find that your account has a certain amount overdrawn. It’s important to keep in mind that you should reach out to your bank to know more about this situation. Paying these fees can sadly make the situation of getting your account back on track more stressful. The reason why is that you will have to pay extra fees in addition to the amount of money you are required to pay regularly to reach a positive account once again. The average cost of these fees can be $30 to $35.
Keep the Account Unused
If you have automatic payments set up, then you may have to deal with some extra annoying steps. That’s because a good rule of thumb is to stop using the account until it is back in the positives. Let’s say your account has a $65 outstanding balance. It is a good idea to leave it at $65 rather than develop a $300 debt that you would have to pay back only to get your balance back to $0. In addition, continuing to use an overdrawn account may result in further fees that the bank hits you with!
You must remember that if you have debts to pay, you might want to wait on depositing your paycheck into your account. That’s because that money will be transferred to the balance that is overdrawn instead. Consider using a check-cashing service if you need more money to cover extra costs like a light bill.
Understand the Situation
It’s necessary that you understand the figures involved when your account is overdrawn. Calculate the amount of money required to bring your balance back to zero and begin building a security cushion. You should also take into account any outstanding debts and overdraft fees that can affect that balance amount.
Continue Saving Until You’re No Longer in the Negatives
With a clear idea of what your account requires, you should concentrate on returning it to its ideal state. The chances that the bank will increase its fees and eventually deactivate your account increases generally the longer you wait to get your account balance out of the negatives. It can be difficult to quickly increase your account balance, but you might be able to do so by selling things you don’t use.
Contact Your Bank
You might not realize how understanding your bank is. The possibility of having your fees reduced exists. Your bank might not charge you if you’ve never overdrawn your account before. Although they are not required to, they could decide to provide a refund. You should try to be friendly despite your anger over your overdrawn account based on this.
However, if you want a little assistance, you might also benefit from contacting your bank. Your bank might be able to work with you to create a payment schedule that will help you better manage your debts in a practical manner.
Try to Prevent the Negatives From Happening From the Start
While the methods above can help you if you’re in the negatives, the best advice is to prevent getting there from the start! You should keep a few tips in mind to prevent overdrawing your account. Some of these tips are:
- Set a Budget
- Maintain Your Budget
- Accept Low Balance Notifications
- Avoid Participating in Overdraft Programs
Set a Budget
Making a budget is one of the most important aspects of your financial wellness. A budget should compare the amount of money you earn to the amount you spend. Let’s say, for example, that you earn $2,500 each month. Along with knowing your income, you’ll also want to see what you’re spending it on. That means making a list of your monthly spending and bills. You might deal with the following expenses:
- $135 for your phone bill
- $40 for a gym membership
- $275 for food
- $315 for car insurance
- $1,200 for housing and utilities
These costs pile up! Let’s imagine that you pay $1,965 in monthly bills after everything. Accordingly, if you earn $2,500, the amount of money you have left over to put toward savings or plans is just $535. By breaking down your budget, you can have a better understanding of your financial situation as a whole.
Maintain Your Budget
You should stay on top of things to make sure you stick to your budget now that you know the fundamentals. This requires keeping track of your earnings when you are paid as well as any expenses you have. You’ll be able to make wiser choices if you are aware of what’s happening with your account! Plus, it won’t likely come as a surprise because you’ll be aware when your account is running low.
Accept Low Balance Notifications
Consumers can choose to sign up for notifications from the majority of banks. A low-balance alert is one particular sort of notification. This notification can be useful when managing your financial situation. That’s because it can add an extra layer of awareness of your account if it reaches a certain limit.
Avoid Participating in Overdraft Programs
The details of overdraft fees will vary based on the bank, so it is important to keep that in mind. Most banks, however, only charge an overdraft fee on customers who join the bank’s overdraft program. Fortunately, customers can leave the program at any time. Transactions that go to a negative account will not be processed without the protection of an overdraft program. That means they will be denied!
To Sum Up
When your accounts are negative, it might feel overwhelming and unpleasant. There are certain tips and advice to be aware of that may be helpful. You should keep the following in mind if your account is overdrawn:
- Ask about your bank’s overdraft fees
- Keep the account unused
- Understand the situation
- Continue saving until you’re no longer in the negatives
- Contact your bank
- Prevent the negatives from happening
When trying to prevent a negative account, you should:
- Set a Budget
- Maintain Your Budget
- Accept Low Balance Notifications
- Avoid Participating in Overdraft Programs
Even while it could seem impossible, managing an overdrawn account is easier than you might think!
