Overdraft fees: A burden and an incentive

US banks are expected to receive a record $38.5 billion in overdraft fees this year. With overdraft fees averaging $26 a pop, that’s almost 1.5 billion overdrafts for the entire country this year. That’s a LOT of people spending more than they’ve got!

As unfair as they seem, especially since they tend to affect those who are the least well-off of all of us, look at overdraft fees as a punishment for treating your finances badly. When a child is punished, it is for doing something bad. The bank is treating you like a badly behaving child. How do you stop it? Be good to your money!

Look at avoiding overdraft charges as a reward for spending wisely. Always spend less than what you have in your account. Even if you buy something with a credit card; if your current bank account balance does not cover the full purchase (along with any other purchases you’ve made recently) do not make that purchase, period.