I remember my mom sitting at the coffee table paying bills and balancing her checkbook on (what seems like) a weekly basis. She would agonize over being off by a penny… It never made sense to me to spend my time worrying about 1¢.
I have managed just fine with using my on-line banking to monitor balances (mint.com) & having overdraft protection set up on all the accounts. Occassionally, we will have a bill get paid before the deposit is recorded, but then our overdraft kicks in and I just transfer funds from another account or savings to repay the overdraft.
This system worked fine when overdraft loans were feeless and just charged interest. I check my accounts every 1 to 2 days and would transfer funds usually the same day, so the most we were ever charged was $0.20.
A couple of years ago, my bank changed their policy and now it costs a flat $2 fee + interest every time we use overdraft protection. The interest is fine, because again, we always notice quickly and so it’s usually less than a quarter. But the $2 fee is a different story.
$2 to borrow $200 for a day is an annual interest rate of 365%! YIKES! Granted we don’t use it every day, but if talking about ROI (return on investment), this one is great for my bank, but pretty crappy for me.
So I’ve been considering paying closer attention to my checkbook and maybe even balancing it…
This kind of goes hand in hand with needing to develop a more strict budget. As mentioned in earlier posts and my about page – my husband lost his job in May. This was within weeks of us closing on a new house with a mortgage more than double our old one. We can still afford our bills, because we were SO undermortgaged before this purchase. However, our lifestyle and attitude about money certainly needs adjusting.
I have started using Mint.com recently and so far I like it. It pulls all my accounts into one spot and sends me emails when I spend more than the budgeted amount on something. I haven’t quite figured out how to use it to its full potential yet and I’m still not settled into a budget I can live with, but it is a start. But, I still get those pesky $2 fees…
So, what do you think? Do you believe that balancing your check book is a thing of the past with all the on-line financial tracking we use today? Or an underutilized tool for managing finances?