The all-important "available balance"

You would think that since I used to be a financial advisor I would be better with my money -- but I used to overdraft my account at least once a month. It's sad, but my New Year's Resolution was to go just one month without overdrafting.

You see, I do math like a normal human being, and banks do math like... well, banks. I've been doing good though. Ever since the New Year, I have only overdrafted once.

There were two key things I changed which prevented me from overdrafting until I forgot why I set those personal rules and broke one... and overdrafted. I guess you need that one regression as a painful reminder.

My Rules for Banking

I used to think I could stick to making sure I always had a certain amount of money in my account at all times, then this or that friend would need a couple bucks and boom, I was negative again. Why?

Recurring automatic payments.

The worst part about those payments is you never know exactly when they are going to hit. One month it could be a Monday, but the next month you get hit on Friday – and since banks subtract before they add, that paycheck hasn't cleared yet and I'm stuck with an insufficient funds fee because the money was technically there but they just hadn't gotten to it yet.

So I canceled all my recurring payments. I don't do anything automatic anymore since the price for convenience is a negative account balance.

My other rule -- I spend money every 3 days, no exceptions. This gives my balance some time to catch up, and it helps me stay away from impulse buys (bonus!).

It's amazing how much extra money you have when suddenly you're not losing $70 to $100 per month to overdraft fees.