How to Break Bad Overspending Habits

You don’t need to know the exact amount down to the penny at every moment, but it’s a good idea to know whether your balance is $500 or $50.

3 min read

N26 is here to help you live your best financial life. We want to empower you to make good decisions so that you can build a better future for yourself.

One important part of managing your money is knowing how much is available to spend in your account. You don’t need to know the exact amount down to the penny at every moment, but it’s a good idea to know whether your balance is $500 or $50.

If you think you have $50 in your account but it’s actually just $38, you may spend more money than you have by $12 — which triggers your account to be overdrawn. 

What is an overdraft?

 An overdraft happens when the amount you spend is larger than the amount in your account. This gives you a negative balance and an overdrawn account. Many banks will cover the difference as long as it’s not excessive, and most will charge you a premium to do so. Overdraft fees cost an average of $35 a pop, and there are often additional charges for every day that your account stays overdrawn. It can really add up fast and hit you where it hurts the most. 

How do I avoid overdrafts?

Almost everyone has overdrawn their account at one point or another. It’s often just a small mistake that can cause you to overdraft your account. But overdrafts can be really costly, even if you just go over by $1, which is why you want to avoid them as much as possible. Here’s how:

Monitor your account daily

If you have frequent overdrafts, it’s probably a sign that you aren’t paying very much attention to your account. Keeping tabs on your account is simple with N26; it just takes a few taps in the app to see your available balance and account activity.

Check your spending habits

Protect yourself from unpleasant surprises in your account by knowing exactly where your money goes. Get in the habit of checking your spending statistics regularly. It just takes a moment with the N26 app, which gives you a simple visual breakdown of your expenses in different categories like groceries, restaurants, and entertainment.

Create and maintain a budget

Use the information from your N26 spending statistics to develop a budget that fits your financial goals. You can try the 50/30/20 method and allocate 50% to things you need, 30% to things you want, and 20% to savings and debt repayment. Or you can use Spaces to create personalized goals and save  money to it at your pace. And don’t think that you have to rely on willpower alone; you can also set spending limits in the N26 app to keep you from going over your budget.

Get the tools and knowledge you need to avoid overdrafts with N26

From spending limits to savings goals, N26 helps you manage your financial wellbeing and make smart decisions for your future. With N26 you can avoid overdraft fees and other types of hidden fees. If you already have an N26 account, check out your spending statistics now to see where your money is going. If you don’t have one, open an account today to experience banking that is fast, flexible, and transparent.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

By N26

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