Overdrawing your bank account isn’t uncommon. In fact, half of all Americans have spent over their account balancefootnoteDisclosure 1, but that doesn’t make it any less frustrating. Figuring out ways to avoid overdraft fees can benefit your wallet—and your state of mind.
(Visual Description: Understanding and overcoming overdrafts
Money and Mindset
Truist title and logo)
Speaker 1:
Let's talk about how overdrafts work and how to overcome them.
(Visual Description: Dictionary definition of Overdraft: A deficit in a bank account caused by drawing more money than the account holds.
Source: Oxford Languages, June 2023
An overdraft happens when you spend more than the available balance in your checking account, and it's more common than you might think.
(Visual Description: 50% of Americans have overdrawn at least once.
Source: Morning Consult, 2021
If you've dealt with overdrafts in the past, it's okay. You're not alone, and you have the power to take more control of your money.
Here's how overdrafts work.
When you spend more than your available balance, the overdrawn amount may be covered to keep the transaction from being declined or returned.
There are a few ways this can happen. If you have money in your savings account, your bank can automatically transfer those funds to cover the transaction.
You can talk to your bank about linking your accounts.
Some banks also offer an overdraft line of credit, which you may be able to borrow from, but later you'll have to pay the overdrawn amount plus interest.
Now, if those first two options aren't available, your bank may cover the transaction, but you'll still have to pay back the overdrawn amount plus a possible fee.
But the good news is that you can take steps to help avoid fees, even if you've been in a cycle of repeat overdrafts.
(Visual Description: You are in control!)
Here are five tips that can help you overcome overdrafts.
First, remember that everyone makes money mistakes. When you hit a speed bump, be kind to yourself and keep taking small steps forward.
Second, control what you can. Making small changes, like automatically saving a portion of every paycheck, or if shopping around for discounts on things like your car insurance or cellphone plan can be big for your budget and happiness.
Other ways to take control include aligning your bill due dates with your paydays to make managing your cash flow easier, or setting up low balance alerts to help you keep tabs on your spending.
Third, limit impulse buys. Whether you're browsing the internet or winding your way through the checkout line, stick to a predefined spending limit.
Fourth, start thinking long term, viewing your financial journey as a marathon and not a sprint can help you stick with small changes, plan for bigger-picture goals and find more happiness over time.
And last but not least, be sure to celebrate your wins. Keeping track of every goal you accomplish, no matter how small, can help you stay motivated.
You've got this. For more tips and inspiration, visit truist.com/moneyandmindset
(Visual Description: Truist title and logo)
Disclosure:
This content does not constitute legal, tax, accounting, financial, investment, or mental health advice. You are encouraged to consult with competent legal, tax, accounting, financial, investment, or mental health professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Truist Bank, Member FDIC. ©2023 Truist Financial Corporation. Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation.
34
resources
34 resourcesThese actions can help give your financial confidence an immediate boost—and build momentum for even bigger wins down the road.
Spending more than you have may make your finances more stressful than they need to be. Understanding how overdrafts work can help you avoid it.
See how this mindset shift can help you build a buffer in your bank account.
Simplify when—and how—you pay your bills to organize your finances and give you better control of your money.
Setting up low balance alerts can help you know if there’s enough money in your bank account to cover your next payment or purchase.
Your available balance is a better indication of how much you can spend. Learn more about the differences between posted vs available balance.
Caroline Adams Miller combines science-based research with real-world examples to talk about how goal-setting can support your overall well-being.
The way we think and feel about money can significantly affect how it influences our lives. Find out how to change your money mindset for the better.
Learn how to create change in your life and finances using the “fresh start” effect.
Getting control of these hidden expenses can help you stay on budget and hit your financial goals
Simplify monthly bills and payments, evaluate spending, and feel happier when hitting “Pay." Here's how.
Whatever your history with money, you can choose to make a positive change. Learn ways to build better habits.
Facing a loss in income is a little easier when you have the right tools. Use this worksheet to help you create a budget with less.
First impressions are important. A strong resume can help recruiters and hiring managers see your best self.
How can automation help to develop good financial habits? It can mean saving more with less effort by automatically putting money towards your goals.
Take charge of your money—and your life—with these budgeting tips and tools.
Build financial resilience while reducing personal expenses with these seven steps to help you get a handle on your money and save for a brighter future.
Saving for life’s surprises is one of the first steps to living a happier, more financially resilient life.
Have a financial goal? Reach it by following these easy money saving tips.
Does your bank account need a boost? Find some extra income in a way that works for you.
You may feel pressured to accept the job offer instantly, but it’s a better idea to pause and think it over. Learn how to evaluate a job offer here.
Increasing your income can have positive impacts on your career and mental health.
Learning ways to earn passive income could have a positive impact on your finances and well-being.
Side hustles are a great way to develop your career and find happiness outside of your day job. Here are some ways to get started.
First impressions are important. A strong resume can help recruiters and hiring managers see your best self.
A positive mindset will help you put your best foot forward in a job interview. Follow these tips to get in the zone.
Take control of what you can and develop a debt payoff plan.
Here are the benefits of debt consolidation and how to tell if it’s the right way for you to reduce financial stress.
Tips to avoid becoming overwhelmed by everyday decisions and keep focused on our goals and well-being.
Decluttering is the first step to being financially confident
How stores use psychological tricks to get you to buy more, and what you can do to outsmart them.
Build good money habits with these three mental strategies based on psychology and human behavior.
Explore the relationship between money and happiness and discover ways to improve both through these eight principles for building wealth and well-being.
FSAs may offer tax advantages and healthcare savings. From doctor visits to everyday essentials, here’s how to use these funds effectively.
{3}
See how these people found ways to overcome their own unique challenges. Their stories just might inspire some ideas of your own.
How I paid off $20,000 of credit card debt in one year
How I quit shopping—and what I learned from it
How I turned my burnout into a business that helps people find career happiness
How I found my calling while focusing on my mental health
How my digital nomad lifestyle helps me live and work while traveling the world
Sign up to get the latest tips from Overcoming Overdrafts right to your inbox.
Money and Mindset
Hosts Bright and Brian discuss ways to grow your financial confidence and live happier.
Check out the full Money and Mindset experience to really dig in.
One simple choice. No overdraft fees. Wondering if Truist One Checking is right for you?