If you write a check or use an ATM card or debit card to withdraw more money than you have in your account, that's called an overdraft. Banks want to help you manage your money, but when you try to spend money you don't even have, that's a serious issue and you may have to pay some serious financial penalties, or the bank may decline your transaction. Make several overdrafts and the bank may close your account. It really pays to be careful.

Available balance is your bank's most recent calculation of the amount in your account based on the transactions they have processed.

This has negative consequences! One of two things may happen ... and neither of them is good. The first possibility is that the bank declines to pay. (In the case of a check, your bank sends the check back to you stamped "non-sufficient funds", or NSF, and may charge a fee. That's called a returned item, or a bad or bounced check, Sometimes the business to whom you wrote the check may charge you too!) The second possibility is that the bank pays the check you've written and your account has an overdraft. In this case, the bank will typically charge you between $15 and $35 for each overdraft, and some banks will continue to charge you every day until the overdraft and fees are repaid. All of this adds up to some serious cash. You could end up paying $50 to $70 dollars if you write a check for even $1 more than you have in your account. It's just not worth it!

Bad checks and overdrafts may cost you more than just cash. For example, banks may be less likely to open checking accounts for you, lend you money, or issue you a credit card if they consider you a poor money manager.

First, keep track of your balance and compare it to your available balance. That way you can avoid spending more than you have. Second, consider a convenient service called Overdraft Protection. With this service, you link your checking account to your savings account, credit card or line of credit. Then, if you spend more than your checking account balance, the bank will automatically transfer money from the linked account to cover your transactions, up to the available balance in the linked account. Banks typically charge a fee for overdraft protection transfers, but it’s usually much lower than their fee for overdrafts. Ask your bank if they offer overdraft protection and at what cost.