One of the most popular reasons for debt problems is derived from an inability to manage day to day finances. There’s so much going on and life can become too muddled to realise there is a problem.
However, managing your finances and staying in the black with your bank is essential for a balanced, healthy life.
Are you often overdrawn in your bank account? Well we’ve created some helpful tips and discuss whether you’re getting the most from your bank account.
Tips to Avoid Going into the Red
If you’re perpetually going into your unauthorised overdraft and being charged exuberant amounts in charges from your bank you need to put financial barriers or checks in place to monitor your money. Some of the tricks I now use are;
- I have an alert set with my bank so they send me a text message when I am low on funds. This way I can take action before they charge me.
- I use a monthly budget planner. There are free budget planners around the web and they will work. Determine how much you spend each month. The interesting section is where all the cash taken out at the cash machine goes. If you don’t know, keep every receipt for a month and you’ll soon realise. For me, my tangible money was going to the kids because I had it on me. Lessons have been learnt here!
- Speak to your bank about an authorised overdraft. This can be a risky strategy because often people consider it to be ‘free money’, which it’s not. An authorised overdraft is still debt but the charges are usually a fraction of the costs of an unauthorised overdraft.
- Get online banking. Most, if not all banks offer free internet banking. This allows you to login to your account frequently and check the status of your account. You can move money from account to account if necessary. You will be more aware of your financial situation if you log into your account at least once a week.
- If you share your bank account with your partner ensure you communicate about money. It’s often difficult to do and can be the source of frustration and fighting, but calmly taking about money and both parties being aware where the money is being spent will reduce fighting and avoid unnecessary bank charges.
Getting the Best Deal from your Bank
I was in Barcelona several weeks ago and was waiting in a queue for some food. There was only one girl serving and she was incredibly slow. However, I approached this situation in the typical British manner. I sighed deeply inside, looked around the take away restaurant and quietly wished for the queue to hurry up.
On thinking this I immediately retracted the thought and wondered what it must be like for that girl serving day and night with a long queue. It’s the British thought process – we love nothing more than a queue and being delayed, just so we can quietly moan about it.
A Spanish man walked to be front of the queue, slammed his hand down on the table, began shouting loadly (in Spanish) and was clearly unhappy about the service. Instead of standing quietly or leaving the establishment, he voiced his opinion and stormed out.
Granted it ruined the ambience but it was an alternative reaction and one which would be totally out of place in the UK.
It’s time to react, however with less hand slamming and aggressive shouting. In a recent piece of research it was discovered that 40% of people were unhappy with their bank because of the service they received or the fee and charges which were applied. However, only a small percentage decided to leave their bank and go to another provider.
The Alternative Bank
There are many reasons why people don’t like changing their bank, such as “I’ve been with them all my life”, “My whole family bank here” or ”It would be too difficult to leave”.
There is no reason to stick with a bank that treats you poorly. In fact, many banks are paying you money to transfer to them.
I was with one bank when I go married whilst my wife was with another provider. We needed a joint account and neither bank had provided us with great customer service. As a result we agreed to join a completely new bank for our joint account. The customer service, support and flexibility has been outstanding.
I have now changed all of my accounts to the same bank which holds our joint account. Good customer service deserves to be recognised. Bad customer service should not be tolerated. Are you getting the best deal from your bank? Have you compared other banks?