by Hope
As I have gotten on better footing financially, I have built a couple of savings accounts, been able to pay all my bills on time and stopped worrying about checks bouncing. But I recently discovered the peace of mind setting up overdraft protection can give you.
I wrote about forgetting to pay my utility bill last month. While I was looking around my bank account at that time, I found the settings for overdraft protection.
At first I set it to my credit card, that is with the same bank, but as I thought about it, I didn’t want to risk an unexpected charge that is counted as a cash advance. So I set up a separate savings account and put $500 in it and set it up as my overdraft protection.
Little did I know that I would forget a bill, I actually paid and need my overdraft protection. Thankfully there is no charge for using this service. Because to cover all the bills I scheduled, I over-drafted my daily checking account by $150.
Talk about a feeling of security!!!
It feels good to no longer worry about bouncing checks or robbing peter to pay paul and so on. I was able to immediately repay my overdraft account and am so grateful for the peace of mind this service gives me. And I think it might be the second most power psychological boost after having a decent savings account available.
I remember the satisfaction of experiencing the very same thing, and it was just a few weeks ago. I misread the amount in my checking account for the amount available including overdraft. I paid a bunch of bills, realized immediately that I was a few bucks in the negative, and then acknowledged happily that this wouldn’t cost me anything. I transferred some funds and moved on. Way to go!
That’s great that you don’t have to worry about checks bouncing, but I’m a bit confused as to how this is better than just keeping an extra $500 in your regular bank account in the first place. Maybe I’m missing something, but it sounds like you’re just making things more complicated than they need to be.