Finding Momentum

I’ve been at Citibank for years now, but I’ve been putting most of my money into an E*Trade sav­ings account (where I get a 4.4% return). Okay, let’s ignore the fact that E*Trade has been going through some rough patches lately (thanks to tank­ing sub­prime loans)… but I feel like that’s a pretty smart thing to do.

So at the begin­ning of break, I trans­ferred much of my Citibank account out to E*Trade. And my checks and my credit cards are all linked to Citibank. But it kind of helps me bud­get my money when I only see a low amount of money in my Citi accounts. It really forces me to con­sider my pur­chases and save.

But of course, the expenses and charges add up. Rebate checks don’t come in as fast as you expect them to. I’m stub­born and refuse to trans­fer money back into Citi. Credit card pay­ments add up. Peo­ple cash my checks instantly. And sud­denly I’m try­ing to ride it out to the end of the month and pray­ing I’ll make it to Feb. 1 with­out bot­tom­ing out at zero. (Feb. 1 is when my par­ents add my allowance for the month. Thanks, Mom and Dad!)

Oh man, I’m so close, but I don’t make it. On Jan 30, a check gets cashed that over­draws my account by $5. That incurs a ser­vice charge of $5 again. My Citi accounts are at a beau­ti­ful sum of -$10 dollars.

On Jan 31, my par­ents res­cue me (thanks, Mom & Dad!).

I’ve learned a few things.

1. Arti­fi­cially low­er­ing the money in the bank really does alter your spend­ing habits.
2. …but obvi­ously not enough. I thought I’d be far more fru­gal than I was.
3. Always keep track of checks you write and make sure there is room in your account. Never assume they’ve all been cashed.
4. I need a bud­get. And the gump­tion to stick to it. More on this later.
5. Mint.com rocks.

I also have a ques­tion for you all: My account was over­drawn for a day (-$10). What hap­pens dur­ing that one day? What sorts of fees did I incur? My check didn’t bounce, so who tem­porar­ily spot­ted me the dif­fer­ence until I could get my account in the black?