Joseph Dillard

Some banks cancelled or reduced Non Sufficient Funds (NSF) Fees and many account holders are very happy about this change. Why would banks cancel such profitable fees? Did they get a change of heart and decide to help struggling checking account customers? Not exactly. Other banks with less overhead expenses are not charging NSF Fees, so traditional banks are following suit to stay competitive. This change means that less fees are being charged to checking accounts and there is more money available to spend. This is a good thing, right? It depends on how you look at it.

If you were charged NSF Fees because you were not managing your money, then the chances are high that your problems are not over. NSF Fees are charged when you do not have enough money in your checking account to cover your spending. Spending more than you make means that you need more money for living expenses and/or bills before your next paycheck. Before, you may have overdrawn your checking account to make up the difference. Then you were charged an NSF Fee. Now, you may be able to overdraw your checking account with certain transactions up to a certain amount without being charged a fee. However, if you need more than the set amount, then you may end up choosing alternative lending methods, such as payday loans. That can still end up being very expensive, so you end up replacing one fee with another fee.

How can you avoid those expensive options? The simplest way is to learn how to manage your money. This means spending less than you make, not using debt to fund your expenses, saving for emergencies, and using a budget to keep track of it all. First, you have to track how much you make and how much you spend. Then you have to decide if you can cut out some of your spending. Finally, you have to put it into a spending plan or budget to follow and keep track of your money. This will help you to manage your money instead of your money managing you. I know it’s not as simple as I make it sound but it can be done and it’s better than the alternative. If I can do it, then you can too. It takes patience, consistency and commitment. You can do it. All the best.