By which I mean, it’s time to take another wack at budgeting…
Once, long ago, I set off for college. Before I went, my mother took me down to the bank and opened a checking account for me. Through this, I would learn to take care of my own finances as well as provide an easy conduit for my parents to funnel money to me as needed. One thing extra she did though was include what was then called “Overdraft Protection.” It was not a line of credit per se, nor was it a credit card. It was just a small amount ($500) intended to cover those moments when the bank decided to clear the checks I wrote, before the checks I deposited. For some reason, banks always prefer to do things in this order and I guess my mom knew full well who she was putting in charge of this account.
Not surprisingly (especially given that I am writing this article) I was hardly the bank’s best customer. I did not qualify for special interest rate loans and before long, I did not even qualify for much sympathy. I was in the habit of using the ATM to tell me how much money I had, not my checkbook register. It did not bother me at all the checks I wrote and mailed that morning had obviously not cleared that afternoon as I withdrew money from my account.
At one point, I had a girlfriend who was so offended by the state of my checkbook register she took charge of balancing it for me. Angrily, she declared I was \$20 off. Apparently, writing “fudge factor” in the register with a \$20 entry in the correct column is not considered consistent with Generally Accepted Accounting Principles. Who knew….?
I even got an unwanted lesson in interstate banking laws of the day. I worked nights at the university computer center. One early morning, I emerged, pay check in hand (no direct deposit in those days) knowing I needed to get to a bank and deposit it. I had checks I was certain would be clearing that morning. Unfortunately, it was still hours before banks would be open and I had promised a friend I would drive to California with him. He had a job interview and wanted a co-pilot.
My bank had spent considerable marketing money to make sure I knew they “had bank locations all over the West.” By my calculations, we would arrive in California just about the right time for banks to open and my friend assured me we had plenty of time to make a stop-off so I could deposit my check. I’m not a lawyer, but apparently the laymen’s interpretation of the banking laws involved, basically stated that I was screwed.
Even so, I muddled on and things generally worked out. It was not until I decided to buckle down and get serious about managing my money that I was able to truly screw things up. As best I can figure, as long as I acted in a fiscally irresponsible manner, I realized that and tended to act with a certain amount of caution. Once I started diligently attending to my checkbook register, bringing home ATM receipts, balancing and reconciling my statements, I developed a confidence not quite yet earned.
As Christmas rolled around, I decided I was doing well enough with my job and my financial management, I could afford to purchase gifts for friends and family. Nothing extravagant mind you, but I figured I had a couple hundred dollars I could spend. So off shopping I went. As I entered my purchases into my register, I was surprised to find money left over! How wonderful I thought! I felt like I deserved a little something for myself since I’d done so well with my money, so back out shopping I went.
Come January, I dutifully sat down to reconcile my statement only to discover I had entered one of my paychecks twice. I’ve been in debt ever since.
Stay tuned for the next exciting episode in which we review the history of budgeting tools and software…