Insufficient funds notices and overdraft fees can be an unnecessary strain on your finances, but with some planning and these five strategies, you can help avoid them. Here’s how: 

Sign up for Account Alerts 

Most online banking services offer email or even text message alerts to warn you of low balances. An alert can notify you when your balance has fallen below a certain amount, such as $100 or $50, reminding you to slow down spending, transfer funds or make an additional deposit. You can often customize alerts to cater to your needs and adjust as you see fit.

Set Overdraft Protection

If you have multiple accounts at a bank, you may be able to set up a linked account as overdraft protection. These services transfer funds from a savings, separate checking, or credit line to cover an overdrawn account automatically. While it’s not always a free service, overdraft protection charges may be cheaper than an overdraft fee. It’s not ideal if you expect to overdraw your account frequently. Still, linking accounts can be a good solution in an emergency situation.

Use Automatic Payments

By setting up automatic payments for your recurring bills, you control when and how much is deducted from your account. The key is to stay on top of these recurring debits and set them up when it works best for you financially (e.g., the day after you get paid). Setting up automatic payments can also help prevent those pesky outstanding checks cashed against your account when you least expect it.

Build a Budget, and Stick to It

There are many ways to approach a healthy budget, some of which we cover in our budgeting article, but a key takeaway is to stay consistent each month. Creating a personalized budget to track income and expenses is a great way to avoid nasty surprises like overdraft fees. When creating one, consider ways to decrease spending (canceling unused subscriptions, dining out less, thrift shopping instead of buying new) and increase income (renting rooms, part-time jobs, contract work, selling unused items ). 

Review Your Account Activity Regularly

Understanding where and how much money is coming and going from your account is vital. It can also help safeguard you against fraudulent activity or unexpected costs like added gratuity, subscriptions and one-off service fees. Try to check your account balances daily or weekly, either online, via your mobile app, by calling customer service, or by visiting an ATM or branch.

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