How to Manage a Checking Account: 7 Tips

By Sarah Li Cain · May 05, 2022 · 6 minute read

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How to Manage a Checking Account: 7 Tips

Managing a checking account may sound like a tedious task, but please keep reading, because it’s well worth a bit of time to get your financial health on track. Think about it: Your checking account is the main way you control your finances. This account is the starting point for where your money will flow — such as to pay bills or fund your savings or investment accounts — so it’s important you take a proactive approach to managing it.

Here, we’ll share the benefits of keeping your checking account humming along in peak condition. Then we’ll break the how-to’s down into seven simple steps so you can easily adopt these habits to enhance your financial life.

Ready to learn some hints to manage a checking account? Here we go.

Why Is It Important to Have Good Checking Account Management?

Knowing how to manage a checking account effectively will help you with many aspects of your financial life such as meeting your savings goals and protecting your money. If you don’t know where your money goes, how effective will you be when it comes to creating a budget or assessing where you are in your savings goals?

Plus, having good account-management skills will protect you against fraud. For instance, let’s say someone stole your debit card and used it to make purchases. You’d want to detect that ASAP before a bad situation got any worse. If you report any losses within two business days, you’re only on the hook for a maximum of $50 according to Federal laws. Otherwise, you could lose up to $500 if you report it after two business days but within 60. Don’t notice the fraudulent charges till past the 60 business-day limit? You’re on the hook for all fraudulent transactions unfortunately.

To recap, good checking account management will help you:

•   Stay on top of your account balance and activity

•   Allow you to better fund savings goals

•   Avoid fraudulent activity and potential money loss

Now, let’s share the seven steps that answer the question, “How do you manage a checking account?”:

1. Know Your Account Balance

Keeping track of your account balance gives you a clearer picture of where you stand financially. Doing so can help you with tasks such as planning for occasional and unexpected expenses, paying off your student loans on time, as well as simply sticking to your budget. Plus, monitoring your account can help you avoid overdraft fees by preventing your balance from dipping into negative territory. It’s easy to make an online payment or swipe that debit card and forget about it, so figuring out how often to check your balance is a wise idea.

You can log into your account online or through the bank’s mobile app, but other ways to check your balance include:

•   Receiving automated text alerts

•   Speaking to a teller at a branch

•   Calling your bank’s customer service hotline

•   Requesting your checking account balance at an ATM

2. Download Your Bank’s Mobile Banking App

If your bank offers a mobile app, it can be a smart idea to download it. Yes, mobile banking is very secure. By adopting mobile banking, you can easily keep an eye on your checking account. What’s more, you can conduct an array of transactions with just a few clicks, such as paying bills, depositing checks, setting up automated alerts, and transferring money between accounts.

Depending on the mobile app’s features, you may be able to link your debit and credit cards to your account, which makes it easier to purchase and pay for things. There may be other features such as a budgeting section, money management tools, insights into your credit score, and even access to discounts at your favorite retailer.

3. Avoid Paying Extra Fees

Many checking accounts charge monthly maintenance fees, but you may be able to have them waived if you can meet certain requirements. Most commonly, you can skip the monthly fees if you set up direct deposits or maintain a certain account balance.

Let’s drill down on one kind of fee in particular: those overdraft fees. Those charges can really add up, and if they are left unpaid, they can harm your credit score. Take a bit of time to understand how your bank handles overdraft fees — will it waive it if your account is in good standing, will it charge you a fee and process the payment, or will it reject the transaction totally and assess you a fee?

Plenty of banks also offer options such as overdraft protection. Typically, this means they will transfer the overdrawn amount from a linked savings account to your checking account automatically, without any charges. Still, you’ll probably want to set an alert so you’re notified when your checking account reaches a certain balance or hits zero. This way you can quickly remedy the situation.

4. Automate Deposits and Payments

Automation can make your life so much easier. Letting technology assist you with your banking can help you keep on top of tasks such as depositing your paycheck, paying bills, or meeting savings goals. Direct deposit is a great way for your employer to deposit paychecks automatically — in some cases, banks will even give you early paycheck access.

Your bank may have automatic bill payment or transfer tools as well. Consider using these for recurring payments to be made automatically, such as ones for subscription services, auto loans, or your mortgage payments. Doing so can prevent missed payments and may be able to help build your credit score. Also, automatically transferring a certain amount each month into a separate account can help you reach your short- and long-term savings goals.

5. Embrace Potential Earnings

Sure, having a nice big cushion of cash in your checking account can make you feel flush. However, keeping excess cash in your checking account could mean you’re losing out on the opportunity to get more out of your funds. Specifically, that money could be earning you more money! As you balance your bank account, you may find there are better ways to make your money work for you.

For instance, there are plenty of ways to earn interest even if you want your cash to remain more liquid. For instance, high-yield savings accounts linked to your checking account can earn you a bit of extra cash while still being very accessible.

6. Take Advantage of Checking Account Perks

To remain competitive, many banks are starting to offer additional perks with their checking account such as:

•   Identity theft protection and assistance

•   Discounts at shopping and dining retailers

•   Extended warranties on purchases

•   Buyer’s protection

•   Health savings cards

•   Cash back on qualifying debit card purchases

When shopping around for a checking account, consider your financial habits. If you shop frequently at certain retailers, it may be worth taking advantage of an account that offers discounts. Or if you use the ATM frequently, looking for a checking account that reimburses you for third-party ATM fees may be a smart choice.

7. Consider Consolidating

Do you have multiple checking accounts? It’s not uncommon for people to have, say, their main checking account, one that they opened to get some reward or perk, and the one that their parents opened with them in high school. If you can relate, you might benefit from simplifying your finances and consolidating all of them into one main checking account. That way, all you have to do is log into a single checking account and monitor your finances. Why overwhelm yourself with many accounts to check on and keep track of?

The Takeaway

Managing your checking account is an important path to staying on top of your finances. It will help you keep on your budget, avoid unnecessary fees, and reach your financial goals. Plus, with all the tech tools today and the rewards being offered, it can be faster and more profitable than ever.

If you’re in the market for a new checking account, take a look at SoFi Checking and Savings. If you sign up with direct deposit, you’ll earn a hyper-competitive 1.25% APY (that’s 41 times the current average), and you’ll be able to access your paycheck two days early. What’s more, you won’t pay any of the usual fees: no minimum-balance, monthly, or overdraft charges up to $50. And we make managing your money super-simple with our suite of tech tools.

Head over to SoFi to see how easy and profitable banking can be.

FAQ

Why is it important to manage your checking account?

It’s important to manage your checking account so that you can see where your money is coming and going. It can help you understand how you can budget better, reach your savings goals, and even detect fraud (such as if someone steals your debit card and makes purchases).

How often should you manage your checking account?

You may not need to log into your checking account everyday. You can take actions like set alerts when your account falls below a certain threshold or set up automatic transfers for recurring payments to help save you time. For many people, checking their bank account once or twice a week works well.


Any SoFi member who receives $1,000 or more in qualifying direct deposits into their SoFi Money account over the preceding 30 days will be eligible for Overdraft Coverage. Overdraft coverage only applies to SoFi Money accounts and is currently unavailable for Samsung Money by SoFi accounts. Members with a prior history of non-repayment of negative balances for SoFi Money are also ineligible for Overdraft Coverage.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Photo credit: iStock/jroballo
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