Thursday Trim the Trash Time: April 6, 2017
Overdraft Protection
Happy Thursday everyone! It is almost Friday so keep on keeping on. Today’s topic is about Overdraft Protection. Having played the overdraft game myself I feel I can give a good perspective on the topic. Overdraft, in my opinion, is a nightmare. I lived for 2 years in overdraft until I finally decided one day enough is enough.
For a solid 2 year period, I was consistently using my overdraft. In fact, for much of those 2 years, I never had the bank account above $0. The bank was so nice to charge us $40 every month we used to overdraft, which was all the time. My account would start at the overdraft limit, and then once my pay was deposited it would still be under $0. Then over the course of the next 2 weeks, it would end up at the overdraft limit again. When that $40 fee came at the end of the month it was a real back breaker.
I knew I had to get out of this terrible spot so it took a bit of sacrifice and some luck. I had a magical 3 paycheque month so I was able to use one of those pay cheques to get closer to zero. What I did was slowly chip away at it until I was finally above zero. It took a total of 3 months but I did it. After that, I made sure I never used overdraft again. What that meant is that I had to build up a healthy emergency fund. I spent the next year building up my chequing and savings accounts so that I never came close to zero again.
Paying overdraft fees is terrible so you have to do whatever it takes to get out of the overdraft cycle. I find it sad that banks charge people fees who are in financial hardship. If you are in overdraft the last thing you need is to be charged $40. Once you get out of it the thought of using it will make you sick, believe me.
Thanks for reading my “Thursday Trim the Trash” post. Tune in tomorrow for my Friday Final Reflection. Have an amazing day!
“You can’t be in debt and win. It doesn’t work!” – Dave Ramsey
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at budgetboss.ca.