Keeping a bank account balance well north of zero is a healthy financial habit.
Why? Margin for money errors.
With a generous balance in place, you can:
- Prevent predatory overdraft fees or embarrassing declines. Sometimes an expense is more than expected. No worries. The extra balance will cover it.
- Avoid money anxiety. Life is full of little financial emergencies. An extra balance acts like a mini emergency fund. One less thing to worry about.
- Automate billing with confidence. Putting bills on auto-pilot saves time and avoids late fees. But, what if a bill hits sooner or harder than expected? No need to sweat the precise timing or amount when you have plenty of cushion in your balance.
The bottom line: a bigger balance is better.
Unfortunately, our data shows this habit does not come easily to kids. The last time I dug up our decline data, “insufficient balance” was far and away the most common decline reason at 62%. (That’s almost three times more common than the second most popular reason, “invalid billing address.”)
So how can you nudge your kids into maintaining healthier balances?
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