Money Management – Managing Your Bank Accounts

One of the most important aspects of sound Money Management is using your bank accounts wisely.

Here are several ideas that can help you regain and keep control of your bank accounts.

If you are in Bankruptcy or in a Proposal, it is recommended that you speak with your Trustee before changing bank accounts.

Warning – if you are in serious financial difficulty, suddenly altering your bank accounts might be unwise.

Bank Accounts

1. Do you have too many bank accounts? How many is too many? That depends on your situation. You should ask yourself:
   
   
   1. Why do you have each of the accounts?
   
   
   2. How much are you paying annually in fees for each of your bank accounts?
   
   
   3. Are you having trouble tracking all of your accounts?
   
   
   4. What will happen if you close out some of the accounts?
      Note – if you are in Bankruptcy or in a Proposal, you must speak with your Trustee before closing out bank accounts!


2. Are you paying too much in fees for your chequing account? Check out our blog on Cutting Banking Costs.


3. Do you have at least one savings account?
   
   
   • Plan to hold on to some of your money by having at least one savings account.
   
   
   • Make automatic deposits to your savings account(s) – get into the habit of saving.
   
   
   • Make removing money from a savings account a serious event.


4. Are you getting the best interest rate on your savings account? While current interest rates are low – they are still better than nothing.
   
   
   • Check out the rates that are available at your bank and at other banks. It does not hurt to ask – and you might just find you can do better that you have been doing.
   
   
   • It is your money – keep it secure and help it to grow safely.
5. Do you have a Tax Free Savings Account (TFSA)? If not - here is the link to the TFSA information at Canada Revenue Agency: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/menu-eng.html - it is worth your while to become informed. If you have more questions, your bank will be glad to speak to you about TFSAs.


6. Make sure your bank has your correct mailing address. You want to be kept informed. If you don’t want all the promotional material that banks mail out – have your account set up to only allow ‘real’ bank mail related to your accounts.

Bank Statements

1. Carefully, and thoroughly check you bank statements, on the day you receive them. Here is an earlier blog we posted on how to read bank statements.


• If there are any items to you do not understand or disagree with – speak with your bank. Do not be afraid of looking foolish, you are paying your bank to take care of your money and you have every right to expect them to answer your questions.
2. Track all of your cheques. Make sure you know which cheques have not yet been cashed. This will help you to reduce the likelihood of NSF cheques (aka ‘bounced’ cheques). NSF – Non-Sufficient Funds means there is not enough money in a bank account to cover a cheque or payment. Not only does an NSF cheque result in a substantial bank fee – it can hurt your credit rating.


3. Do not rely on your bank to always be right – banks make mistakes.


4. If your paycheque is deposited directly to your bank – match your paycheque stub to your bank statement. Make sure that the correct amount is deposited to your account.


5. Make sure your pre-authorized payments are set up to come out on days that make sense for your paydays. For example, if you are normally paid on the 15th of the month, it might be wise to set up an automatic payment for four to five days after the 15th, rather than four to five days before.


6. Make sure your bank statements show pre-authorized payments that are in the amounts you have agreed to. Where it is for utilities, check your bank statement to your utility bills for that period. Just like banks, utility companies can make mistakes.


7. Make sure your pre-authorized payments are being taken from your bank account. If you have not been charged for payments you have authorized – find out why.
   
   
   • Do not go on the assumption that if they did not deduct it, you do not owe it. Too many people are horrified when they are suddenly hit for six months of payments all at once.
   
   
   • If you owe it, make sure you pay it.
   
   
   • Keeping up to date will make your life much easier in the long run.
   
   

Bank Relationships

Your bank is providing you with a service, not doing you a favour.

Don’t be afraid to ask questions – it is your money.