Overdrawn Checking Account – CMO Clan Makes A Big Mistake

Everyone makes mistakes, even CMO. And recently my family and I made a big money mistake. I remember that recently Steve at Think Save Retire urged his readers to share their failures, and not just their successes, and so I wanted to share this with my readers. Why? Because everyone makes mistakes! No one is perfect, even if they somehow seem to be from the outside. Sometimes I worry that people take a look at my goals, or the surprise success I’ve had with this site, and think that my life must be oh-so-perfect with us just cruising along on the financial independence train. Nope! This is real life, and stuff happens.

So sit back and enjoy laughing at the confluence of events that recently caused us to overdraw our checking account by hundreds of dollars. And yes, it’s OK to laugh at my mistakes! Even though it was a pain, hopefully this story will help someone realize that it’s OK to make mistakes, talk about them, and learn from them.

A Morning Chat

My husband came up to me early on Tuesday morning, around 5 AM, as I was sitting at the computer doing work for this site. He gave me a smile, and a nice kiss. Then he gave me a funny look.

“What?” I said, somewhat annoyed he was interrupting my early morning of trying to figure out what I was going to do on this site. Little did I know our conversation was going to spark this article.

“The checking account is negative by over two hundred dollars,” he said in a surprised tone of voice.

“WHAT!” I said loudly, waking up the two year old still snoozing away on the couch. “How did that happen? It’s never negative!” My immediate thought was that it had been hacked, because it’s never even close to zero. Someone must have hacked into the debit card and gone on a spending spree.

Stupid identity thieves.

“I don’t know,” he said, “when I was shopping for the Boy Scout books yesterday I was having some trouble with the debit card. I logged on to the app and it showed the account was at zero dollars. So I went to the bank and deposited a few dollars left over from the laundromat, but then this morning I logged on and it was negative.”

Side note – Our washing machine broke recently and we had to get a new one, which hasn’t arrived yet. So we’re stuck washing our clothes in the laundromat until it gets here.

I immediately opened a new tab on the computer and logged into the checking account. It asked me for my security code, so I had it call the house and give me the code so I could log on. Sure enough, when I got in I saw a negative balance by a little over $200. When I clicked to look at the transactions, I could see the most recent one was the homeowners and car insurance, for a little over $200.

“How did this happen???” I said, scrolling through the transactions to try and figure it out. After all, we keep a thousand dollar buffer in the account specifically so it will never overdraw.

My Checking Account History and Strategy

When my husband and I first met, I was a teenager and he was in his early 20’s. Even back then I was a responsible money nerd, having read the Wealthy Barber around 16. He was….less responsible and had multiple issues overdrawing his checking account. But I literally never did. After we got together my good money habits rubbed off on him and he stopped overdrawing his account. Eventually we combined accounts and I managed it so that we always had a buffer in there.

My strategy for the account is to always keep a specific dollar amount as the “floor”. Currently our floor is a thousand dollars. This way if an emergency comes up, or an unexpected bill, we have extra in there to absorb the cost until I can do a transfer from savings. Using this strategy we’ve only gone negative in the account once in over 20 years.

The one time the account went negative before was after my husband almost died from septic shock. That was a time we were really struggling to make ends meet every month. Huge medical bills were coming in, there was no income except from me, and for the first time in our lives as parents we had to pay for daycare. My husband usually watched the boys (just two of them back then) and of course he was in no shape to do so when he got sick. So we had to pay a thousand dollars a month for child care. There was one month that I told my husband not to spend any money because I had to pay the daycare bill and we weren’t going to have any extra money until I was paid later in the week. Unfortunately he forgot and took the boys to a park, spending a bit of money, and that took the account negative. I was forced to do a savings transfer to cover it. Honestly, though, that situation was really a severe crisis situation and understandable given the circumstances.

But not this. It was just an ordinary week! What the heck could have happened. I continued to dig through the transactions.

Finding The Big Mistake

As I scrolled through, the first thing I noticed was that it had been getting dangerously low for the past five days or so. Right after I had paid the mortgage it had gone to only $600 total balance, well below my buffer. Usually my husband or I check the checking account balance every few days, but we’d been busy with work, kids, and my sons 14th birthday party preparations and we must have forgotten. Also honestly with the buffer sometimes we slack on checking it as often as we should.

I continued to scroll down and saw a check that took $550 out of the account right before I had paid the mortgage.

“What’s this check for $550?” I asked. I hadn’t known of any checks that large being outstanding.

“It was for the plumber,” my husband said. He had called a plumber to the house to fix the toilet and replace the sewer pipe in the basement. I knew he had called a plumber but not that it was $550. I’m in the wrong career.

“Ugh!” I said exasperatedly. “You need to tell me about checks that big! Look what happened, now we have a negative balance.”

“I’m sorry!” he said, “I wrote it on the calendar!” He then proceeded to show me, and sure enough, he had not only written the plumber appointment on the calendar but also the fact that it cost $550.

“But that’s a huge expense! You can’t just write it on the calendar, I don’t check that for spending. You need to tell me!”

“I’m sorry,” he said, “I thought you’d see it.”

Ugh! Although I was annoyed at his mistake, I wasn’t too mad. You know, it happens. We kept talking about it and I kept scrolling through the transactions, trying to see if there might be something else in there.

Of course, the moment when it went negative was when we paid the mortgage.


The mortgage?


Why were there two mortgage payments-one in late September and one only two weeks later in early October?

Oh my god.

“Todd,” I said. “It wasn’t you. It was me. I accidentally paid the mortgage twice this month.”

“What???” he said, walking over. I showed him. Sure enough, I had paid the mortgage on September 25th and again on October 11th. Our mortgage payment is way more than the buffer we keep in the account. My strategy is to always pay the mortgage every other paycheck, and then since I get paid every two weeks, I have two months each year I get an “extra” paycheck and can skip paying it one paycheck. I then use that extra money to put into savings. The non-mortgage paycheck goes toward all the other bills like the car and home insurance, electric bill, automatic college savings, and other such things.

How did that happen? Remember that I pay the mortgage every other paycheck. Well, I’ve been crazy busy over here with work and life, and when I got paid on October 5th, for some reason I thought it was the mortgages turn. But no, no it wasn’t. That was supposed to be for this paycheck coming on Thursday.

We both started laughing at the crazy confluence of events that brought us here. I checked into transferring from savings into checking, but the transfer would hit on the same day as my paycheck. So we decided to simply wait for me to get paid in two days, not spend anything until then, and have my husband go down to the bank and talk with our main contact there about what happened. We would beg for mercy and a fee reversal.

Yep, looks like I’m not alone in thinking this

The Lessons

From this funny event both my husband and I learned several things:

  • Don’t get lazy! We can’t slack on checking the account balance-we need to keep a much closer eye on it, even when life gets busy. Sometimes we slack because we keep a big buffer here, but we need to be more on the ball
  • Communicate! He needs to tell me about outstanding checks, particularly large ones, and not write them on the calendar where I don’t look
  • Be on the ball! I need to triple check that I’m using the right paycheck to pay that stupid mortgage
  • We are very fortunate. Paying the mortgage twice and paying $550 to a plumber only caused us to overdraw by a few hundred dollars. If we didn’t have such good money habits, it would have been much, much worse. As it is we were able to quickly and easily fix the mistake.
    • Follow-up: It took some time at the bank, deposits from other accounts, and freezing the checking account for a few days. But we were able to make it the few days until payday, and they’re not going to charge us overdraft fees. Phew!

It’s amazing how after being together for about 20 years, and married for sixteen, you can still make mistakes and keep learning.

What Was Your Money Mistake?

I agree with Steve at Think, Save Retire that we can learn just as much-if not more-from each others mistakes as our successes. I’d love to know more about mistakes you’ve made with money-big or small. So let me know in the comments a time you made a mistake with money, so I don’t feel alone!

Be sure to follow my blog for more great posts via e-mail or WordPress, or connect with me on Facebook or Twitter and say hello! You can also check out what I’m buying or baking on Instagram,  what I’m pinning on Pinterest, or the latest books I’m reading (or want to read) over on Goodreads.

P.S. Thanks to my friend Mr. JumpStart for reminding me about the other recent posts around financial mistakes! I’m glad to know I’m not alone here. If you’d like to see just how many mistakes the rest of us can make, check out these other great posts!

  1. ThinkSaveRetire – Don’t brag about success; tell me your failures
  3. Chronicles of a Father – My Financial Mistakes
  4. OthalaFehu – Budget Bungles, Money Muddles, and Fiscal Flubs
  5. Turning Point Money – My Financial Mistakes
  6. Femme Cents – 7 lessons I learned from my biggest financial mistake
  7. Jumpstart From Scratch- Recent Financial Blunder
  8. The Frugal Gene – Top 5 Sorry Financial Mistakes Of My Early 20s
  9. Gen Y Money – My Tell All: Investing Mistakes in my 20’s
  10. 99to1percent – Our 6 Financial Mistakes and 15 Lessons Learned
  11. Atypical Life – 5 Super Lame Financial Blunders From My Life
  12. Winning Personal Finance –
    My 7 Most Regrettable Financial Decisions
  13. Foreign Born MD – My Biggest Financial Mistake – Over A Million Dollars Worth!

30 thoughts on “Overdrawn Checking Account – CMO Clan Makes A Big Mistake”

    1. It sure is! Luckily I have money in the bank (just not my checking account) to cover such a mistake. And the silver lining is no mortgage payment until December! 😀

  1. jumpstartfromscratch

    I use the electronic payments, and hardly ever write a check. On the USAA website, in the checking account, at the top, there is a section labelled future balance. Sometimes it alarms me, because it will show the mortgage payments 25 days out, but it helps prevent me from overdrafting. Paper checks are the one thing causes issues.
    Good post. I think my recent financial blunder was worse. The bank should reverse your penalties.
    Consider linking up with this chain by Chronicles of a father with cents.

    1. Luckily they did reverse the penalties-we’ve been good customers for a very long time.

      Thanks for the reminder about the chain, I’ll need to join up tonight!

  2. Ouch! Sorry this happened! But hey, good thing you caught it. Stuff like this happens, especially when life gets hectic and busy. Mr. Picky Pincher and I like to meet weekly to go over our budget; we also keep a healthy buffer in the account that we don’t touch. I had to pay an overdraft fee once in my entire life, and that was enough for me!

    Hmm, my biggest financial mistake was probably just buying A LOT of crap that I didn’t need. Impulse spending was my worst habit and it really added up.

    1. chiefmomofficer

      I love how you guys have a weekly budget meeting! That’s one of those things I always think about doing, but life gets in the way. So we’ve just been doing net worth reviews. We’ll need to figure out a better way.

  3. We go with the floor method, too, and I probably rely way too much on the floor to avoid any overdrafts. i track spending far more carefully than balances.

    Our last financial mistake was forgoing the insurance on a beach rental and paying the deposit. We assumed that we would get it back quickly and it would just go back on our credit card, so we left the $1000 balance on the card. It took 5 months, despite the fact that we had done no damage. Meanwhile, we ended up spending more in interest than we would have for the insurance. This year, we just ponied up for the insurance.

    1. chiefmomofficer

      Yikes! That must have been frustrating and annoying. And I’m now rethinking my floor strategy, although I think the best strategy is to just remember to not double pay the mortgage. 😀

  4. I overdrew just a couple of weeks ago too! Not a common occurrence at our house…problem was that I inadvertently used the wrong checkbook. We rarely write checks these days and when the need arose a couple of weeks ago, I didn’t even look at which account it was. Turned out I used the checkbook for my own account (which I keep a very small amount in), rather than using my husband and I’s joint account. Frankly, I don’t know how I managed to not notice…the checkbook is so old that the address on it was over 4 moves ago and had my maiden name! Long story short, I have no valid excuse!

    1. chiefmomofficer

      Oh no! I hate it when things like that happen. But I feel more like I’m not alone with making mistakes 😀

  5. I’ve overpaid our credit card by accident before. There’s a period near the due date where pending payments don’t appear but the balance doesn’t reflect as paid. I hit one of those one time and worried I missed it by accident so we repaid. Beyond that every transaction is written in a check book so we have at least not overdraft.

    1. Unfortunately my mortgage company doesn’t show very well when you’ve already paid for the month. So once you pay this month, it just shows the same amount due with next months date. So if you don’t pay attention (like I wasn’t, obviously) it’s easy to miss.

  6. Double whammy! well, at least you figured it out and more $$ next month for Christmas presents! and yay for the bank taking away the charges.

  7. Awe! Thanks for sharing 🙂 so much communication needs to go on within a family, between a couple, for so many things, one really has to be a CMO of the household! My mortgage is an automatic deduction from my bank account, but sometimes on payday, I get overzealous with taking money out and moving it to my other savings account. I usually keep about the minimum ($3000) so I don’t have to pay bank fees.

    The past two months, I took too much out and got charged $10.95 for both months, but thankfully I played the overtired-new-mom card and get it reversed by giving them a call!

    1. chiefmomofficer

      Gotta play that new mom card while you can! 😀 I still try to play it now but my little guy is two years old. Kidding!

  8. I actually paid the mortgage twice in a month but I immediately called the bank and they basically applied the 2nd payment to the following month. The downside was they held my money for a month. It might have been better to just suck it up and apply the payment at that point but in this case it was one of my rental properties. Thanks for joining the chain and glad you were able to reverse the fee. Having a good relationship with your financial institution helps making sure that a quick phone call takes care of this eventualities.

    1. chiefmomofficer

      It’s great that you realized quickly and they were able to take care of it! My mortgage company has horrible customer service (I wrote all about it before in an article called Death Star) so even if I called them I don’t think they would do anything to help

  9. Yes, communication is key with all the relationships that you have in your life. Not only the people in your private life but also at work with clients, co-workers and acquaintances.
    When we eventually buy a home, I have to create system on paying the mortgage. I may just automate it so it would be on ‘set it and forget it’ mode.

    1. chiefmomofficer

      I’ve thought about automating it before, but my paycheck is on an every other week schedule. By paying every other paycheck, when I have a three paycheck month I get to “skip” a payment. Then I put the extra into my mortgage payoff fund. But if that’s not a concern, automation is a great idea.

  10. New to this blog, so please forgive me if I’m missing something. I have two comments.

    First: why not automate your bills? For example, several of my bills (like my mortgage) are set up to be drawn automatically from my account every month. While I have to remember to have adequate funds on hand, I don’t have to remember to send them a check. Others I schedule to go out on a specific date. The bill-pay service automatically tells me the amount and date of my last payment, and triggers an error message if I try to make a payment to the same vendor on the same day. Both of these features have prevented me from making duplicate payments a couple of times now. 🙂

    Second: do you not have overdraft protection? We used to have Chase. If for some reason a charge would hit our checking account, Chase would replenish the account with sufficient funds as a cash transfer from our affiliated Chase credit card. Not an optimal solution, but better than bouncing a check. We now have Ally Bank. Their overdraft service simply transfers money from Savings to cover any overdraft in Checking.

    1. Hi Richard & welcome! Thanks for stopping by and for the good questions.

      1- I don’t automate the payment because my mortgage company and bank don’t let me automate the way I want. I get paid every two weeks, and I have two (sometimes three) months each year I get three paychecks. So I want to pay it every four weeks, but then every six weeks during a three paycheck month. I direct that extra check to extra savings/investing. In this case the payments were two weeks apart, so a check on same day payments wouldn’t have saved me. But I’ll look at my bank again to see if they might have any new features that might help!

      2-I don’t have overdraft because I never go to near zero (well, except when I make a mistake like this). I keep a $1k buffer at all times for unexpected expenses. Only problem here is that my mortgage plus taxes is $2300. So a $1k buffer wasn’t enough.

  11. I double paid my credit card last month. I had set up an payment, but the log in screen kept telling me I had a balance due, so I paid it. I logged in an was surprised to be under the floor I keep. I was very confused until I realized what happened. I use that card for just a few things, so rather than let it sit positive for months, I used that card for a planned bigger expense. Hooray for keeping a healthy balance that it didn’t cause me to overdraft, and flexibility to use that card.
    I’m glad you got to the bottom of the mystery and they reversed the fees.

    1. chiefmomofficer

      Glad to hear I’m not the only one who made a mistake like this! Those companies need to make it more obvious when you’ve already made a payment.

  12. Thanks for sharing, my biggest mistake was trading penny stocks. Not really that detrimental but a big waste of time and a little money when I was in college. I wish I would have focused on learning about index investing or getting involved in real estate. Even taking big risks with the small amount I was putting into the markets int something that could of been much more profitable would of been a better idea….bitcoin in 2011 doesn’t look bad.

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