Understanding how to manage your checking account is an important step toward financial success. Taking care of your account helps you avoid unnecessary fees, keeps you aware of your spending habits, and is an essential part of catching suspicious transactions.
But managing your checking account is more than just a good idea. In order to stay in good standing with your credit union or bank, you must be able to cover your payments. Here in Hawaii and the rest of the US, a history of bad account management could hurt your ability to open a new checking account for up to five years!
So what does it mean to manage your checking account?
For starters, it involves always having at least the minimum required balance in your account. Here are a few other ways to correctly manage your account:
- Knowing your account balance at all times
- Avoiding overdraft charges (don’t spend more than you have!)
- Staying below any transaction or withdrawal limits
- Monitoring your account for fraudulent activity will take some effort on your part, but once you get into a rhythm, keeping your account in good shape will be second nature
Here are our top 3 tips for handling your checking account like a pro:
1. Check your balance often
Debit cards are simple to use, but they can get you in trouble if you’re not diligent. Adopt a habit of reviewing your balance every week. Avoid using your debit card when your account is teetering on the low end.
We recommend setting up Digital Banking notifications to give you a heads up when your account reaches a certain balance, or when transactions post. You should also consider enrolling in an overdraft protection program. Overdraft protection helps you avoid costly fees associated with return payments from insufficient funds. Remember: never spend more than you have. When in doubt, check your balance before swiping your card.
2. Review your monthly account statements
We know how easy it can be to let your monthly statements get lost in a sea of paperwork or emails. Don’t let this happen. This monthly check-in is vital to the health of your account.
There are three things you should look at when reviewing your statement:
- Purchases: Double-check all the purchases you made over the last month. Were the purchases for the correct amount? Are there any suspicious transactions?
- Deposits: Make sure the money you deposited—whether in-person or through direct deposit—was correctly entered into your account.
- Account fees: This third category encompasses any additional activity on your account beyond purchases and deposits. This could include charges like overdraft fees, minimum balance fees, or ATM fees. Make sure you understand these charges and aim to avoid them in the future.
If you ever notice questionable activity on your statement, contact your credit union or bank immediately.
Lastly, your statements may contain sensitive information. If you receive your statement through the mail, carefully file or shred it after you’ve reviewed it.
3. Keep your account secure
An important part of correctly managing your checking account is ensuring the safety of your money and private information. There are a few everyday precautions you should take to keep your account secure, including:
- Ensure no one is watching when you enter your personal identification number at the ATM or checkout counter
- Always do your online banking on a secure, private network
- Don’t give out your private information to people you don’t know or trust
- Never share your online banking password
Beyond avoiding fraudulent purchases, keeping your account secure is also important for avoiding identify theft. In today’s digital world, identity theft is a scary reality. Explore identity theft protection.
