checksNSF fees. Also known as Not Sufficient Funds fees, they’re the fee that the bank takes out of your account when you try and take out more money than you actually have. Overdrafting or overdrawing your account is the technical term for when the withdrawal exceeds the available balance. If that sounds complex, Wikipedia has a breakdown of what that means.

As a bank teller, NSF fees are one of the worst ways I’ve seen money leaving peoples’ accounts. Your money should be working for you, rather than increasing your bank’s profit margins. From service charges, to account maintenance fees, to NSF fees, fees are one of the ways a bank makes money. And NSF fees aren’t small either; they’re approximately 20 to 40 dollars, depending on your bank. They also can add up quickly. Fortunately, there are ways of avoiding them.

The Nitty Gritty Bank Policies Explained
Here’s a checking account primer on check holds, because even if you’re good about balancing your check book, you may not remember to account for the holds. It’s pretty tedious, and even though banks are required to disclose this information, not everyone is aware of it. So here’s the breakdown: Whenever you’re depositing money, the bank can put a hold on your account, depending on what you’re depositing. (Don’t worry though, banks can’t lock up all of your money, no more than deposit amount.) This is to protect the bank in case there’s something wrong with the deposit.

Ever see “Catch Me If You Can“? The main character, Frank Abagnale Jr. cashes fraudulent checks at the banks expense. Yeah, guys like him are the reason banks have this policy. Now whenever a check is deposited or cashed, there is a hold placed on the account for the value of the deposit. This means if you’re cashing a check for 300 dollars, you may have your 300 dollars in hand, but 300 dollars in your account is no longer available for withdrawal, for the time being. If you’re depositing the 300 dollar check, there is also a hold (still just the 300 dollars).

What gives? I’m not exactly one to sympathize with big corporations, but the bank is trying to protect itself. It can’t lock up your funds forever though. By federal law, 100 dollars has to become available the next day. As for the rest of the check (in this case, 300 minus 100 so 200 dollars), there is a special code written on the check that tells when the rest of the funds become available. Most of the time, it’s within three to five days. This bit’s a little tricky, but the easy answer is to just ask. Your bank can tell you when all your money will be available.

Cash by the way, is by federal law required to be available next day no matter what the deposit amount, as are government checks and paychecks. And if you’re really interested in this more tedious aspect of finance, it’s regulation CC, and you can find more details here.

So what does this mean for you?
Forgetting about holds is where I see most people go wrong in managing their accounts. Say you’re trying to make a purchase and with that 300 dollar check you deposited yesterday, you can cover it, but not all 300 dollars are available yet, because the hold is still in place. This means that you get hit with an NSF fee. If you have a debit card or master money card (any type of card that draws the funds directly from your account electronically), this sort of overdrawing can happen all too easily.

When Bad Things Happen To Good People
Sometimes you just can’t help it: if money is tight, you may accidentally overdraw your account. Of course, if you’re following the tips my fellow Queercents writers have been giving, chances are you’re less likely to do so, but everyone makes mistakes. So what do you do now?

First off, there’s a chance you may get the fee returned to you. For a lot of people, an NSF fee is a mistake and a one-time occurrence. I think this is important; I’ve known people who are otherwise very careful with their accounts get an overdraft fee and simply accept it, while I’ve seen my boss return numerous NSF fees. Just by talking with your bank, you may have your money returned to you. It’s not a guarantee, but you’ve got nothing to lose by asking.

The next step is to make sure it doesn’t happen again. NSF fees create a dangerous cycle because they add up quickly, and the more NSF fees you’re paying, the harder it is to get to your balance to a point where you’re less likely to over-draw. Just today I watched one customer get hit with three fees in as many days, meaning she had 84 dollars in fees. Often it’s insult to injury because the withdrawal amounts are less than the fees. There is hope though.

Cut out the trips to Starbucks or the sandwich shop, or whatever place you’re most likely to spend, for a little while, so that anemic account can bulk up. I’m a sucker for giving into temptation, so sometimes it’s easier to just abstain by avoiding shops you may feel inclined to spend. Stay as far away as possible from anything that isn’t a necessary expense. This should free up enough funds to get you to the important step: redefining a zero balance.

Redefining a balance is a psychological trick that is exactly what it sounds like. Even if your account has no minimum balance to avoid a service charge, create one that is high enough to cover you might need. In plain-speak, rather than trying to keep your account above zero, make 100 the new zero (or 500 or whatever you need it to be). Treat going below this new minimum like you were going below zero. This way, if you miss a step you just have to work back up to your new zero balance, rather than paying a fee and being handed that shovel.

Like saving in general, this is all mental. You have to be able to trick yourself into believing that this new, higher balance is essentially zero. I’ve operated my main account for over three years now, and never had an over draft on it, but it takes some restraint to convince yourself that that buffer money isn’t really there. Not only that, but when you truly need the money, like your emergency fund, you’ll have a little extra cushion.