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Dealing with Money: Oops! I overdrew my bank account

C.
by C., Dimespring 30 (@dealwithmoney)

How did it happen? Well, it's hard to explain. Actually, it's not. I was careless. I authorized a transaction to go through before I had the money in my account. Why? I have no idea.

Banks are not terribly forgiving about overdrawn accounts, which begs the question: Why do they allow this to happen? To me, it would make more sense if banks just universally refused to allow overdrafts. In other words, if the money isn't in the account, the transaction doesn't go through. A novel idea, but perhaps not very lucrative for the banks, which often make money from people's financial slip-ups. This system is definitely flawed. Just like credit card companies, banks make money by cashing in on people's money mishaps.

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For me, overdrafts usually occur in one of two instances: I either expect that I will have the money to cover the transaction before it's due, so I authorize something to go through on a certain date, or I simply lose track of my purchases, thinking I have more money in my account than I really do.

In my most recent overdraft incident, my account went thirty dollars into the negative. When it comes to just being forgetful about what I've bought and how much I have left, I'm guilty as charged. I'm not one of those people who balance their checkbooks. In fact, I rarely write checks. I also don't write down every transaction the way I've seen some people, particularly those of an older generation, do.

Personally, I don't think taking a pen and paper and writing down every transaction will prevent my overdrafts. The reason being that people all forget at some point. That dinner out, that can of soup at the store, a birthday present for a friend  things happen, and mistakes are made. In my case, the mistakes happen to be pretty expensive.

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When I overdrew an account for the first time, I went into a panic. It's still not a pleasant experience, but I'm an old pro at it now. I will admit that this isn't probably something to celebrate, but sometimes writing means being brutally honest, even when said honesty is admitting to financial illiteracy.

Luckily, I'll be calling my bank soon in the hopes that they'll forgive this mistake. I think once I explain my situation they might be willing to help me out. But probably only once. After that, I'll be on my own and liable for any overdrafts that occur. Some banks will even charge by the day on overdrafts. This was how I ended up including a few written-off bank accounts in my bankruptcy.

Once my financial situation stabilizes, I feel that these incidents will be few and far between. But for now, I'll try to summon up a sense of humor about it. After all, it happens to everyone. Right?
 

C is a 28-year-old college graduate with an interest in personal finance. When she graduated in December 2010 with nearly $42,000 in college debt and no job prospects, she knew it was time to change the way she thought about money. She is currently figuring out a way to pay back what she owes and build a more stable financial future. C is a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and perspectives on personal finance.