Showdown!
Budget Ronin vs. the Overdraft Overlord!
"Helpless against Service Fee Magic, a new technique revealed!"
A week or so past, I answered the house phone and got a fun surprise!* A creditor was kindly calling to remind us of a past due amount on a credit card on my Budget Naginata's account. I had a quick chat with her, because I had hoped it was a mistake. I spoke with Naginata and she informed me this was her overdraft account.
I knew she had an overdraft, but neither of us realized it was that out of sorts. Mind you, I'm not blaming anyone for anything. I have an overdraft on my account as well, and it stays mostly maxed out at this point because we can only barely cover the bills we have, which is kind of the whole point of this blog anyway.
So what next? Well, we scrape together the money to pay off the late fees for the overdraft, but it kind of puts us back where we were in the first place, which is more money out of pocket and more in debt. What's a Budget Ronin to do?
I discussed this at length with Naginata and we came up with a few things:
1. Two overdrafts is easily one overdraft too many. We're getting hers shut off and we're going to pay it off so that it's done, never to be resurrected.
2. We're looking at closing that account of hers. We have two accounts to cover my steady paycheck and normal bills/expenses and hers as a sort of slush fund for other expenses. This is not really working well, since you shouldn't have to pay penalties for your slush fund. It's supposed to be for extra money, not extra money we don't have.
3. We've decided to move the expenses she typically concerns herself with over to cash. Typically Naginata writes the check for groceries, Budget Edamame's schooling and gas for the vehicles. We think that by moving them over to cash we have a better chance at maintaining a tighter budget and more control over recognizing what financial latitude we have at any given point.
Here's how #3 is going to work out. Mind you, I don't consider this revolutionary, we've both read of things like this from other sources, but after some review, we think it might work well for us. Cash in trackable envelopes. We're going to mark envelopes with specific amounts of cash that we know we'll need for each of our expenses: Groceries, Gas, Edamame's school. We'll deposit cash in the envelopes for use for those budgeted expenses and withdraw them to pay for the items. That way we know exactly what we have and don't have available to us. Need gas? No overdrafting, get money from the envelope. Extra money is rolled into the next envelope. Hopefully we'll eventually actually get enough extra money to put into savings or something fantastic like that. And so it goes...
Since we need to know how much to put in, this puts us in the position of budgeting our groceries in a more orderly fashion. Planning for stock items like litter and toilet paper every two months and edibles every other week. This also puts us in the position to splurge less on trips to the store, which has been a vulnerability in our otherwise good plans.
I don't know if any of this will work, but I know that paying service charges on overdraft fees for money we don't have isn't making me sleep any better at night, so we'll try this for now.
And if think that having loose cash on hand puts us at risk, I should warn you that I fill the Budget Clan Compound with deadly spiders. Hundreds of thousands of deadly spiders. It's so dangerous to intruders that we don't even actually live there anymore.
Unrelated, I'll be trying new catchphrases until I get one I like.
Neither Standard nor Poor,
B.R.
*note: Actually, not fun at all.
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