Since many high school or college students may be managing a checking account for the first time, I thought it would be useful to share some tips. As with much financial advice,many of these tips focus on problems/mistakes you want to avoid (resources for post here, here and here). Interesting class lesson might include a conversation on how to avoid these costly mistakes:
- Set up e-mail alerts on your account to notify you when your checking account falls below a certain level so you can avoid the next item on list.
- Avoid bounced checks – you pay two sets of fees (median fees $30 from retailers and $27 from banks) and shows that you don’t have a handle on your finances.
- Minimize overdraft fees – good news is the bank provides you with funds to prevent you from overdrawing your account, bad news is that you get charged a fee for it.
- Avoid monthly fees – they show up every month and may not be much ($5-$10) but they add up over time. Some banks will offer students no-fee checking so be sure to comparison shop.
- Avoid Out-of-network ATMs – you find yourself out of cash and not close to your bank’s ATM. What do you do? Use another bank’s ATM and pay a fee. Some banks will provide a benefit by waiving this fee so read the account details closely.
- Keep your PIN private – you gave someone else your PIN number and they took money out of your account.
- Know if there is a deposit lag – you deposit a check into your account and don’t realize that it takes several days to “clear” and for your account to be credited. Can lead to #1, bounced checks. Find out the bank’s rules on funds availability.
- Protect your debit card.
- Your checks are lost or stolen – Yikes! What would you do?