Keep A Bank Account Buffer To Avoid Over-Limit Fees

Keep A Bank Account Buffer To Avoid Over-Limit Fees

Few things ruin your budget more than unexpected fees for being overdrawn. To keep this from happening, make sure you always have a buffer of money that you never budget or spend to avoid bringing your balance to zero.

Photo by George Redgrave

As personal finance blog Money Under 30 explains, a buffer ensures that when you miscalculate your finances by a dollar or two, you don’t end up with loads of fees from your bank that drive you further down the hole. This is something that anyone can do:

Whether you’re 15, 25 or 65, if you’re having trouble with your money and want to improve, the very first step you should take is to build a bank account buffer… When you have a bank account buffer in place, you don’t have to worry that a poorly timed Starbucks break you charged to your debit card will overdraw your account and trigger a $35 overdraft fee.

Ideally, the larger the buffer the better, but it doesn’t have to be huge. Even an extra $10 or $20 in your account can ensure that buying a coffee won’t end up costing $40. It’s a small price to pay to potentially save yourself lots of money in the long run.

Why You Need A ‘Bank Account Buffer’ [Money Under 30 via Rockstar Finance]


  • Or you choose a bank that doesn’t have any overdraw fees.

    Last time I accidentally overdrew my account, I received an email telling me that I had 3 days to sort it out, and if it was still in the red after that I would be charged 10%pa compounding daily. I just left it until I got paid, my error cost me 2 cents from memory.

    I just avoided putting my opinion into a debate one time and the 2 cents was not missed.

Log in to comment on this story!