Are you running out of money even though you work hard and try to be careful with spending? If that’s the case, you might be making some simple banking mistakes. Even a small error can have a big impact on your finances. Find out about the most common banking mistakes that might be affecting your money.
If you’re not careful, making mistakes with your money is easy. From paying fees you didn’t know about to not sticking to a budget, these seemingly small errors can have a big impact in the end.
Paying high monthly service fees.
Although it’s not common, some checking and savings accounts these days don’t come with a monthly fee. If you’re getting charged $15 to $30 every month just for having an account, it might be a good idea to explore other options. There are many banks and credit unions that won’t charge you any fees.
Some banks might waive the monthly fee if you meet certain conditions, like maintaining a minimum balance or having your salary directly deposited into the account. If you choose a fee-free bank, make sure to carefully read all the terms and conditions before signing up.
Keep in mind that some of these accounts might have extra charges for basic banking activities. In some cases, these fees could end up costing you more than what you’d pay in fees at another bank.
Maintaining funds in low-interest accounts
Avoid low-interest bank accounts because they offer less return on investment. They may have hidden fees like monthly maintenance or transaction fees, reducing your earnings. Before opening an account, read the fine print to understand all potential fees. Overall, keeping money in low-yield accounts may result in less interest, additional charges, and potential losses in emergencies.
Not using online banking
Maybe you’ve seen ads for online banking or heard friends talk about it. But you might wonder why you should use online banking. Is it safe, and what’s in it for you?
Online-only banks are challenging traditional banks with modern website designs and easy-to-use smartphone apps. They attract customers by providing more accessibility and convenience. However, some people find it intimidating because these banks don’t have physical branches or traditional customer service options.
Not taking full advantage of bank perks and rewards
Don’t forget about bank rewards! You’re missing out on discounts, points, and other benefits if you’re not using them. Credit card companies often offer extra cash back at partner stores or gas stations. You can also reduce service fees by having multiple accounts with one bank. Some banks even give sign-up bonuses when you open a new account. Keep an eye on your bank’s perks and rewards programs to get the most out of them.
Using the same password for different accounts
Be careful with online security! Many people use the same password for everything, but that’s risky. If someone gets your password, they can access sensitive data. Protect yourself by using different passwords for each account. You can also add an extra layer of security with two-factor authentication (2FA). This means you’ll get codes through text or email for added protection.
Not Paying Bills Online
In today’s busy world, it’s easy to forget bill payments. But with online bill pay, you can set up automatic payments and never miss a bill again. You might even get discounts for paying early or using automatic payments. Don’t worry about security—online bill pay is as secure, if not more so, than traditional methods.
Keeping a large amount in your checking account
Many think keeping a lot of money in their checking account is wise for easy access. However, it might be better to put that money in a savings account or invest it to make it grow. Having a large amount in your checking account can be tempting, and you might end up spending it on non-essential things, leaving your savings depleted.
Paying withdrawal and overdraft fees
Did you know that the average American household pays $329 in bank fees every year? A big part of these fees comes from overdrafts and withdrawals.
There are ways to avoid overdraft fees. You can sign up for alerts from your bank through text or email, which lets you transfer funds into your account before any fees are charged. Many banks also offer overdraft protection programs for a small monthly fee. These programs help you avoid overdraft fees by automatically transferring money from a savings account or line of credit when needed.
Similarly, you can avoid withdrawal fees in a few ways. Check with your credit union or bank to see if they charge these fees and how much they are. Another way is to keep a minimum balance in your account.
Sticking to a single bank
Diversifying your bank accounts is smart advice. Having more than one account has benefits for managing your money effectively. New customers often get great deals, so exploring different banks for loans, credit cards, and accounts is wise. You could save on fees, enjoy higher interest rates, access more services, or even receive a sign-up bonus!