Gear ShiftI had a misadventure lately with my money recently. My automobile insurance broker called a few months ago to inform me that they had a deal for me. I could switch from my old company to a new one and I would save $30 a month. I made the switch with little hesitation. Those are the personal finance basics I like. I signed the forms and went on my way. Having a clean driving record does pay for itself. Normally I would advise that you negotiate these sorts of contracts on your own before they come to you, because let’s face it, they will usually avoid giving you a deal if they can.

I was thrilled. I was using an older savings account from which the old insurance was being withdrawn and decided to use a new account with my new insurance company. That was my first mistake. I didn’t check the old bank account. I basically forgot about it. The simple plan was to assumed that everything was fine and I would let the small amount of money in there collect a few pennies worth of interest each month.

Fast forward 6 months. My bank calls me with an urgent message. One of my accounts is in a negative balance by nearly $400. How could this happen? I always watch what I buy and budget myself accordingly. After looking at the statement from the said account the problem was strikingly clear. The old insurance policy had not been cancelled by my broker. They had continued to withdraw money from my old ‘unused’ bank account for 6 months to the tune of nearly $900.

Monitoring your money is one of the personal finance basics we all need to take care of. It’s easy to make such an error and that is the type of mistake that is completely avoidable. I was both angered and embarrassed by this situation. ‘How could I let this happen?’ I asked myself on the way to my insurance broker. I have known how to manage my money since I had my paper route when I was 12. I have never had a negative balance until now.

Thankfully my insurance broker was apologetic and rectified the situation immediately. Things could have been worse. Much worse. For that period 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 advise to watch your money is probably the simplest of the personal finance basics to follow. If you have a dormant account close 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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