It finally hit me in my second semester of college. Where did all my money go?!
After I opened my checking account straight out of high school I ran up my account with overdraft fees. I thought I had been smart and I tried to keep track of all my receipts but I ordered one Carmel Frappuccino too many and incurred a $30 fee.
After several of these overdraft fees I wised up and asked for help. Nana, being the kind soul she is, taught me old-school lessons on how to manage money.
Now, not everyone has a Nana in their life, so in an effort to save you the time and money you’ll use handling money carelessly, here are some easy tips that worked for me…
1) The Checkbook.
Now I realize that carrying around a checkbook can be daunting. But really, it’s worth it in the money you not only save but keep track of. The trick I use to keep track of money is a sort of “keep the change” method. When writing something down I write the amount down and then next to it I write the amount rounded to the nearest whole dollar. For example: the hot boots you buy are $27.30. When you write it down make sure you write $28 next to it. By doing so you can keep track of money in whole dollars AND keep the change. 70 cents may seem trivial at the time, but think of the money you can collect over months if you do this with EACH purchase.
Nana calls this a cushion. So that when times get rough you can dip into the cushion for cash. Also, if for some reason you forget to write something down, you have some cash in the bank to cover it and avoid a late fee. Sweet!
2) Do NOT trust the bank.
For some reason people have this blind faith that the bank runs smoothly at all times. It doesn’t. The bank is run by people, like you and me. People make mistakes. About once a month I sit down with my checkbook and access my account online. I make sure each receipt matches up, each check went through, and that there are no double charges. The bank fixes mistakes all the time, but they can’t fix them if you don’t catch them.
3) Write it down.
The hardest thing to keep track of, for me, is all the bills I have to pay. At first I did it all online, through email. This worked for a while but sometimes I wouldn’t receive a bill in my inbox and I would forget about it, leaving me with the late fee. Now I make sure to write it all down in the beginning of the month. I use a small notecard to write down each bill, how much it’s for, and when it is due. Once paid, I draw a thin line through it and move on. Not only can you look to see what bills are due instantly, but when it’s all crossed out it gives me a feeling of accomplishment. Aha! Take that bills!
Overall, make sure you’re paying attention to your money. It’s easy to depend on automated systems and online account summaries but nothing beats an actual person keeping track of where money goes after it leaves your wallet.
We work hard for our money (duna duna), let’s not let it be a waste.
Great tips, Christina! I love the “keep the change” thing! Really great advice