Million Dollar Savings Club Update (Day 76)
November 6th, 2006 |
This post is part of the Million Dollar Savings Club. If you’re not familiar with this club you can read my post describing it.
Today I want to look at the savings pile. $76 in the savings pile is starting to get significant isn’t it?
Have you ever wondered why banks offer free checking accounts? It seems like they give you bank cards, checks, and online banking for free. But is there a cost?
Most people don’t keep a lot of money in their checking accounts. Banks can’t make a lot of money off these accounts by loaning it out, So how do they make money from them?
One big way is bounced check fees. You see, banks know (with amazing detail) that from time to time we overdraw our checking accounts. If you do this just once a year the bank has already made plenty of money off your ‘free’ checking account. With debit cards in place they can get a nice snowball effect and collect hundreds of dollars from you in bounced check fees.
Have you ever overdrawn your checking account by a just a few dollars? The moment you realize it, you have a day or so to get money in the checking account before you get hit with a hefty fee. But what if your paycheck is a week away?
If you have $75 to ‘temporarily’ put into your checking account you can save yourself a lot of grief. That’s exactly what the savings pile is for. Perhaps the savings pile is worth a lot more than $75. If it only saves you from bouncing 2 or 3 checks it would have already paid for iteself.
Isn’t it funny that the people who have no money pay these bounced check fees and fall further behind? But you don’t have to worry about this because you’re building your savings slowly and steadily one day a time.
