Checking accounts are the Swiss Army knives of financial tools. They offer a safe, convenient way to track your income and expenses, pay your bills, and stick to your budget.
While you can use your checking account to enroll in payroll direct deposit and schedule recurring bill payments, you shouldn't just set it and forget it.
Here are five checking account mistakes to avoid that can interfere with your financial plans.
Mistake 1: Failing to maintain a checking account buffer
Utilities, fuel, and groceries are just a few everyday expenses that can vary every month. And if your expenses and income are pretty close to the same amount, spending only a few more dollars in each category could cause an account shortage. That shortage could result in payments bouncing or being declined by the bank. If at all possible have a buffer, which is some extra cash in your account not assigned to any specific expense. This can give you peace of mind and could save you from having to pay unexpected fees.
The buffer acts like insurance against early or unexpected withdrawals from your account. Your monthly expenses will determine the buffer amount that works best for your situation. But you can start by keeping an extra $50 in your account and gradually build up to an amount equal to one full paycheck.
Mistake 2: Not keeping an eye on checking account transactions
The Bank of Missouri has robust fraud monitoring in place for your debit card transactions and notifies you when there is suspected fraud. Still, a scammer might be able to do damage that automatic monitoring cannot detect. If you don't monitor your checking account regularly, you might learn about fraudulent activity only after the damage has been done.
Take advantage of your bank’s digital offerings to keep a close eye on your account. Bank of Missouri customers can enroll on our website or download our app to get started.
From there, you can sign up for transaction alerts for further protection.
Check your transactions regularly. If you see any transactions you don't recognize, report the incident to a banking representative immediately.
Mistake 3: Failing to keep your debit card safe
You’ll want to take steps to protect your debit card. If it falls into the wrong hands, it can be used to make purchases before you realize it's stolen. Keep your debit card safe by adding it to your phone's mobile wallet. This contactless payment method ensures your account number isn't shared when you pay for your transaction. Instead, a unique number is generated to process each payment, providing more protection for your debit card details.
Mistake 4: Treating your checking account like a savings account
Depositing money into an FDIC secured account is one of the safest ways to build your emergency fund. These accounts are insured up to $250,000. But keeping your savings and checking funds in the same account can slow your progress toward growing your savings nest egg. It's too easy to spend money earmarked for savings when you use one account for multiple purposes.
Clearly see your progress toward achieving your financial goals by maintaining a savings account that's separate from your checking account. If both accounts are at the same institution, you can instantly transfer funds between accounts if you need to.
Mistake 5: Not taking advantage of checking account benefits and special perks
Have you explored all the ways your checking account could save you time and money? If you only focus on the basics, like deposits and bill payments, you might miss out on some of the benefits and perks of account ownership.
The Bank of Missouri offers free rewards checking accounts to match your financial goals. Choose from cash back, digital credits, or earn higher interest on balances with Kasasa® checking.
Keep more money in your account by avoiding these common mistakes and by selecting the right checking account for your needs. Visit the checking accounts page to learn more or open an account today.