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.