In this tight economy, even the smallest of unnecessary fees can be a burden to our strapped finances.  One of the best ways to not only curb unnecessary fees, but also manage our finances more successfully, is to supervise our banking operations more closely.  I mean, it’s our money, right?  You wouldn’t willingly hand your wallet or purse over to a stranger to monitor, would you? 

Many individuals don’t keep a close watch on their bank and its operations because they’re unaware of their ability to control their accounts and make important decisions.  One of the biggest problems that bank customers face is the issue of overdraft fees.  According to a study by the Durham, N.C.-based Center for Responsible Lending, banks and credit unions collected nearly $24 billion in overdraft fees in 2008--35% more than two years earlier.  Below is a breakdown of how to put the consumer back in control and armed with the right knowledge to manage their finances successfully. 

First and foremost, you need to know your bank’s policies.  No, I’m talking about the seemingly endless, too-small to read fine print that most people can’t understand.  Regardless of whether you’re signing for a new account, or have been a veteran customer for over ten years, it’s up to you to find out the right information.  Do some investigative work and find out what’s most important to you.  Pick up the phone or even head to your local branch and start asking questions. 

Secondly, and this may seem strange, but opt out of overdraft protection.  Many individuals don’t even know that they have overdraft protection, because some banks will enroll customers into the program without their approval.  The problem with overdraft protection?  The fees that come with it.  If you are enrolled in overdraft protection and your account goes negative, your bank will tack on hefty fees, daily, to cover for the charge.  No overdraft protection?  No overdraft fees.  However, your bank obviously won’t front the money for the charge you are attempting to make.  Some banks have programs that carry lines of credit for overdraft protection, and while the interest you would pay is less than the fees tacked on by the bank, it’s better to simply manage your bank accounts and maintain a minimum balance than pay the bank extra money. 

Take advantage of the times and enlist in the technology that’s available.  Instead of saying balance your checkbook (do those even exist anymore?), it’s more appropriate to say balance your technologies.  In this day and technologically-savvy age, more consumers are using online technologies to manage their money and finances.  Many banks will allow their customers to arrange for an alert to be sent to them by text message or e-mail if their balance falls below a certain amount, and when a payment date is coming up. 

Next, make sure to carry at least one backup card.  Of course credit cards come in handy when it comes to a lack of cash situation, but they are not the answer when it comes to managing your finances successfully.  While keeping an extra one or two credit cards on hand can help prevent running out of payment options if some sort of fraud-related hold strikes your account, prepaid cards are a better answer when it comes to avoiding interest rates, overdraft fees, and late payment penalties. 

Finally, plead your case.  As I pointed out in the “know your bank’s policy” section, it is important to stay in contact with your bank and communicate with them when it comes to policies and fees.  If you slipped below your account balance or have an ATM fee that’s unreasonable, don’t hesitate to call your bank manager and plead your case.  Especially if you are a good customer and this is an uncommon occurrence, your bank should side with you and waive the fees.  Institutions trying to keep their customers should have discretion with these issues, in hopes of keeping their customers.  If they’re not sympathetic, take your business elsewhere. 

Know that as the consumer you hold the power.  It’s your money, and you should have control in its management and decisions.  Secondly, you must understand that it takes initiative to understand the banking process, but that it’s well worth the time and effort it takes to comprehend how your money is being taken care of.  Avoid giving your purse or wallet to a stranger, and stop paying your bank excessive and unnecessary fees--$40 coffees just aren’t worth it. 

Photo: imelenchon, morguefile