Don’t Let “Insufficient Funds” Ruin your Life; Be Prepared!

 

Banks don’t like it when you bounce checks, and neither does the person whom you were attempting to pay.  In order to take care of such discrepancies, banks have various set policies regarding insufficient funds… typically ones where they make a nice little profit off the offending check writer.  Yes, banks need to stay in business, but some of them are getting outright ridiculous with their penalties, and it’s happening at a time when they’re raking it in while the plebes eat potatoes.

Bouncy isn’t always Fun

If you have inadvertently dropped a rubber note, or feel you may be at risk of doing so, there are a few things that you are going to need to know, a few more you’ll need to do, and a lot of stuff you’ll have to get in order.  We know that today’s economy is pretty brutal, and cashflow has gone down to a trickle for most of us, but you are best served if you can find a way to put some emergency cash away for situations like this.  It is also important for you to have a banking relationship already in place that’s more personal and friendly than today’s typically cold, atomized, and impersonal arrangement. 

 So yes, in order to be prepared for some unfortunate financial turn of events, you should always have an emergency fund stashed away somewhere that will cover, at the very least, your bank’s penalties for insufficient funds, plus enough to get you a new account at another bank… if your bank decides to drop you.  With the way that a lot of banks are run these days, where managers act like machines and put best practices well before the community’s best interests, you run a pretty good chance of this.  A lot of this has to do with the ChexSystems software employed by a lot of banks, so make sure your bank is one of the few and proud that do not have it.

Build it Up

The quality of your relationship with your bank is probably the most important factor in keeping the damage of a bounced check to a minimum.  The closer you are with your bank, particularly with the management and officers, the more likely they will not hit you with crippling fees and penalties.  There’s no need to have “summered” with Muffy, Tad, or Tripp at Camp Gitchawallet if you’re looking to get “in” with your local bank.

 If you want to earn the respect and good graces of your local, community bank, get involved with them on local, community projects.  A good working business relationship doesn’t hurt too much either.  If you’ve gotten yourself established, don’t abuse your relationship.  When you’ve violated any regulation or law, it really does pay if you’re sincerely apologetic without being cloying or obsequious.

 
Do it like a Cub Scout

Preparation is very important in any situation, but particularly when you wind up with insufficient funds.  It’s important that you aim high, and never intend to make this potentially grave mistake.  It costs too much money, and has too great an effect on your status as a bankable client.  But if you make these preparations today, we guarantee that you will thank us later.