We have all done it: overspent our checking accounts by forgetting a transaction (or two). If you overdraft your checking, you are likely to get hit by some big fees, often ranging anywhere from $15-$30 or more. Get multiple overdrafts at once, and your bank account will shrink faster than the Pittsburgh Steelers’ playoff hopes. (A bad thing for me; perhaps not so bad for you, depending on where you live. But you get my point.)

So how do you avoid overdrafts, and giving back to the bank everything you make in interest and then some? You can

• Keep a register
• Add overdraft protection
• Link a savings account
• Limit your debit card usage

Each of these tips takes a little practice and discipline, but once you are in the swing of things, you’ll leave overdrafts in the dust and save money in the long run.

It may seem like the simplest thing in the world, but fewer and fewer people keep a register of their checking account transactions. It might be due to the proliferation of debit card spending (more on that later), or perhaps it is because so many folks now bank online, and can get transaction printouts at a moment’s notice. Yet a large percentage of account holders never write down their checks, ATM withdrawals, and debit card transactions, which is the first step toward overdraft disaster. When I worked as a banking supervisor, most of the escalated situation calls that I took were from angry customers who had overdrawn their accounts; when I would ask them (politely, of course) if they had kept a register of transactions, they would invariably say “no,” an answer which tends to end the argument immediately. Especially if you have had trouble with overdrafts in the past, simply take the five seconds or so to write down each transaction, every time. Then balance your checking account every few days at the least.

A layer of security is to add overdraft protection. Most banks offer overdraft protection as a credit account that is attached to your checking; when your checking becomes overdrawn, the credit account covers the difference. If you pay it back within a few days, your savings versus an overdraft fee can be considerable. Still, you will want to watch the fine print for interest rate hikes, and not carry a balance in the overdraft protection account for any length of time to reduce your interest owed.

If you have poor credit, your bank may deny you overdraft protection (One of the ironies of banking is that the people who need overdraft protection often can’t get it, while the people who can get it, don’t need it). In this case you can always link a savings account to your checking. The bank will shift funds from savings to cover any checking shortfall. Keep in mind two things. First, the bank may charge you a fee every time they have to transfer money. Second, your savings account is not a checking account, so the federal government limits how many withdrawals can be made per month through something called Regulation D. Exceed those limits, and your bank has no choice but to fine you yet again, usually $15.

Finally, in extreme cases you may just want to limit your debit card usage. Although Congress is working on ways to outlaw it, when clearing items at the end of a day, banks often deduct the biggest amount first, which means that all the smaller transactions from that day can each trigger an overdraft fee. This can spell big trouble. It won’t be good for all those debit card rewards we talk about here on BankShout, but if you really want to avoid overdraft fees, take out cash once a week and then use that for those little items like coffee or a pack of gum.