Watch Your Money - Personal Finance Basics

Recently I had problems with my money. My car insurance broker called a a couple months ago to let me know that they wanted to give me a deal. I could switch from my old company to a different one and I would save $30 a month. It seemed like a no-brainer to make the switch. That's the kind of personal finance basics I like. I signed the forms and went on my way. It shows that a clean driving record does pay for itself. Traditionally I would advise that you take care of these kinds of contracts well before they come to you, because let's face it, most insurance companies will usually avoid giving out deals if they can.

I was excited. I was using an older bank account from which my old insurance was being withdrawn and started using a new account for my new insurance company. Mistake number one. I didn't look at the old savings account. I basically forgot about it. The simple plan was to assume that everything was fine and I would let the small amount of cash in the account collect a few pennies worth in interest each month.

Jump ahead 6 months. My bank calls me with an urgent message. I have an account that is in the red by nearly $400. How could this happen? I always pay attention to what I buy and budget my finances accordingly. After looking at the statement from the old account the problem was strikingly clear. The old insurance policy wasn't cancelled by my broker. They had continued to withdraw money from my old dormant bank account for six months to the tune of nearly $900.

Monitoring your cash is one of the personal finance basics everyone should take care of. It's easy to make a mistake like this and that is a type of error that is totally avoidable. I was both angered and embarrassed by what had happened. 'How could I let this happen?' I asked myself on the drive to clear it all up. I have understood how to manage my money since I had my paper route when I was a young teen. I have never had a negative balance in my account.

Thankfully my insurance broker apologized and fixed the problem immediately. The problem could have been worse. Much worse. For that amount of time a person with ill intent could have taken out massive amounts of money without my knowledge and I might have been left to foot the bill. My suggestion for you to pay attention to your cash is probably the most simple of the personal finance basics to follow. If you have a dormant account terminate it. If you have a credit card you don't use, cancel it. Your hard earned money can be fleeting if you don't stay on top of it.

Please visit more of my blog to receive the free E-Book, free budget spreadsheet, free calculators and links to various tools. We also have a few leaked videos to help with your finances.

Until next time,

Conrad

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