At some point in their lives, a large number of people will have incurred bank costs. The major reason why people get bank costs is because they have surpassed their spending limit on their bank account. The problem then is that they are further overdrawn and liable to receive further penalties in the form of bank fees, interest and charges. This can become a spiraling no win situation. However, there are ways in which you can avoid bank fees. If you are unfortunate enough to already be in this situation, then there are ways of reducing your fees and limiting the damage.
Causes
The major cause of people paying bank fees is that they have overspent on the limit of funds that area available to them. This may mean that they do not have enough money in the bank, or that they have reached their overdraft limit. One way to avoid this situation is to budget carefully each month. Make a list of all the money that you will have going into your account and all the money that you will have going out of your account. It will also help to consider the dates that these transactions take place. If you are fully aware of your financial situation then you can take control of it and take any measures to ensure that you do not exceed your spending limits. If you are aware that one particular month you will have more money going out than you have coming in, then try to make sure that you save some the month before or that you reduce costs in any areas possible.
Spend less
It may seem obvious, but to reduce the likelihood of you overspending, simply spend less. If you don’t need an item, then don’t buy it. Also, look through your bank statements for areas in which you could make saving. This could mean reducing your heating costs, spending less on groceries or using the car less often to save on the cost of petrol.
Budget
Another way in which bank fees can be incurred is through not having sufficient funds in the bank to pay for items that are set up by direct debit. Again, use your budget to look at what dates all of your payments are due and then ensure that you have enough money in the bank at that time to pay for each item. It may be possible to change the dates of payments so that most things are going out on the same date and this will be easier for you to understand, remember and manage. If you get paid on the last day of each month, then it is a good idea to arrange for all your payments to go out of your account on the first day of the next month. This will then give you some idea of what you have left to spend for the rest of the month and not leave you in a situation where you have difficulties in paying for certain bills.
Arrange an overdraft
If you are aware that you are likely to spend more than you have available, then arrange an overdraft in advance. Having an arranged overdraft incurs far less cost than exceeding your limits without prior arrangement. If you have already got an overdraft then it is possible that you may be able to extend this further. The best idea is to meet with your bank manager who will be able to advise you of the options available to you and advise you on the best course of action to take. In some circumstances, it is more financially viable for you to take out a loan than to extend your overdraft further as the interest incurred may be lower. The bank manager will be able to give you advise on which option will best meet your needs and incur the least financial penalties.
Conclusion
In conclusion, it is important to take control of your finances and not to let them spiral out of control. Budgeting, saving and being aware of your situation are the best courses of action to take. Meeting with your bank manager for appropriate financial advice will ensure that you make informed decisions on the best courses of action to take to achieve this.