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?