$20 Billion the easy way

myfico.com reports that an estimated $20 Billion in fees were generated by banks in 2009 on overdraft fees on debit purchases and ATM transactions. In a separate study in 2008 by the FDIC, 14% of people generated 93% of overdraft fees collected by banks.

Come on People!!!!

I have a busy life too but overdraft fees - ESPECIALLY when it happens consistently - are Mega-Budget-Busters. I would love them to do a study on the correlation between consistent overdrafts and financial success. Here are some suggestions:

1. Go back to basics with your budget. This might mean simply "doing" a budget but if this is an issue for you then make a change today. You cannot expect your tomorrows to be different and better if you don't do something today.

2. Get overdraft protection so that when/if you go into the red you have a cushion. There's obviously some potential pitfalls if you abuse this but if you don't abuse it then you'll be glad you had the cushion in those rare instances where you go over your budget and would otherwise be hit with an overdraft charge.

3. Some banks (not all) will let you link a savings account to your checking to serve as your overdraft account. If this is an option then it's a no brainer.

Banks are also good at layering the overdraft fees as well...so the domino effect can cause your "one" incident to turn into multiple overdraft charges so take action on this to save yourself some potential grief. Remember what grandma said, "an ounce of prevention is worth a pound of cure."

Tom Gazaway CCEW, CMPS, XCO
Hawkeye Management
888-783-1503 toll free