As I often remind my clients, banks are not charities; they will capitalize off of you as much as you allow them to. Sure it’s highway robbery to be charged an average of $35 for taking a quick swipe at McDonald’s, but the bottom line is if you didn’t have the money in your account, it’s your fault. Banks don’t care if the kids where whining about a happy meal. Your negligence just cost the family $35 for a toy that costs $0.035 cents (yes, less than a nickel) to produce. If this happens to you a couple times a month, we’re talking about nearly $1000 a year that could go towards paying down debt, building up emergency savings or even college and retirement planning.

•     Keep your Register Updated. Simply put, if you don’t know how much money is in your checking account right now, then you are at risk of overdrawing your account. Many people falsely believe that keeping a check register in their head is a good idea.  It’s inevitable that you will forget something. Instead, make it a habit by entering each check or debit card purchase as it is made. Set aside time when you get home to check your receipts and balance your register. Do this every time you spend, and soon it will be second nature.

•     Don’t Forget ATM Withdrawals. One of the easiest ways to lose track of your money is to forget to record cash you withdraw from an ATM. It happens to people all the time – they forget to record the withdrawal and when the bank statement comes they find out they have hundreds of dollars less than they thought. Nip this potential problem in the bud by always getting an ATM receipt. Place the receipt in a safe place. When you get home refer to the receipt to enter the withdrawal into your register.

 •     Remember to Record Automatic Payments. Having your utility or insurance company automatically take payments out of your checking account can be very convenient. Overdrawing your account because you forgot to record an automatic payment is unquestionably inconvenient.

•     Cushion your Checking Account. Having a little cushion in your account is probably the most effective way to stop overdraft fees when all else fails. To create a cushion, record a withdrawal in your register of $50 or whatever you want the cushion amount to be but leave the money there. Try to forget about the cushion and carry on as usual. If you get into trouble and accidentally spend more than your balance that $50 will be sitting there to take up the slack, and hopefully prevent a hefty fee.

 •    Sign up for overdraft protection. Usually the protection plan stipulates that money will be taken from your savings first, and then from a line of credit given at a fixed rate. However, overdraft protection generally requires an account with a minimal balance and that the account-holder passes a credit check.

•     Check your balance frequently. This is an absolute must if you don't qualify for overdraft protection. Take advantage of account information offered over the phone and online.  With the ability to check your account information even from your mobile phone, there is really no excuse to not be aware of your balance.

•     Know your available balance versus your current balance.  Pay careful attention of the difference between these two because the latter reflects the amount in your account minus any pending transactions. Always base your spending on the amount in your ledger in order to avoid confusion and potential fees.

•     Make deposits early in the day. Be aware of the hours in which your deposit will be processed. Usually this is before 4 p.m., Monday through Friday. This guarantees that the money is credited directly into your account that day.  If you are transferring online, the cut offs are usually 5 or 6pm depending upon your bank.

•     Choose credit. Run your check card through the credit system and not through the debit system. Not only do vendors often attach hidden fees for using the debit system, but these charges are immediately suspended from your current balance. The credit system, by contrast, debits your account in the order in which the charges were made on the next business day. Thus, your account activity will more accurately reflect your ledger.

•     Opt out all together. Because of the Credit Card Accountability, Responsibility and Disclosure Act, you now have the option of opting-out of overdrawing your checking account. What this means is that your bank can switch off the feature on your debit card that allows you to go over what you have in your account, and your card will be declined at the time of purchase. The one exception to this is that pending transactions will still overdraw the account. For example, if you use your debit card as credit and sign for it, the purchase clearing your account is dependent on the merchant and when they batch their credit card items. It could take several days to clear the account. If you use your card in the meantime, forgetting to subtract out the first purchase and spend more than what you have available, that pending charge will clear and overdraw you. Again, this is why tip #1 is to keep your register updated.