Debit or Deposit: My Big Money Mess

Summer has really done one on me. As a result, it appears that my blog is taking on some of the characteristics of a confessional. I shared my college financial mistakes earlier this week, and in July I shared a rather embarrassing incident involving one of my checking accounts. But today I must confess an even bigger -- and more embarrassing -- money mistake I made earlier this month, but didn't discover until yesterday.

I entered a debit as a deposit in my personal finance software.

How It Happened

I have personal finance software. But I do not link it online to my bank accounts, so I have to enter my transactions manually. I arranged to pay my husband's student fees for the semester, and when I went to record, the auto-fill function kicked in. Since my husband also has an assistantship, he gets paid by the university. So I just changed the amount in the auto-fill, and didn't think anything of it. Sadly, I also didn't check to make sure the amount was in the proper column. So, instead of recording a debit, I recorded a deposit.

And then on with the rest of the month, confident that we had plenty of money.

Something else happened as well: One of my clients didn't submit an invoice to the proper department. This is a trusted client, one I've worked with for more than three years, so I know the mistake is being cleared up. I wasn't worried, though, because, when I checked my personal finance software, we had plenty of cash to tide us over until the $800 gets here.

Then, yesterday, I checked my bank account online, just to make sure everything was in place for the automatic debits that come out on the first of the month. My bank account had much less money than I expected! So I compared the online record with my personal finance software and saw my mistake. Devastating! It made a massive difference, and my account was going to come up short.

How Disaster (And a Pile Up of Overdraft Charges) Was Averted

First of all, I started panicking. An emergency fund online takes three to four business days to access. This makes sense in some ways, since it provides liquidity, but you are forced to consider whether or not you are in an emergency situation. I definitely was, but without a debit card, had no way to get the cash I needed to make sure the money was in the account as needed -- although thinking back now, I could have paid for a wire transfer.

My husband asked if we had room on credit cards. Well, yes. But I don't have the PINs for cash advances because I never get cash advances. I began rooting around for the car title. Just in case. Then I called my parents.

Lucky for me, my parents had more than what I needed in their emergency fund, which is in a local credit union in their home town. My dad went and withdrew the cash, and then took the money to a branch of my bank in their town. Within minutes, the money was there, and financial ruin avoided.

Game Plan: Avoiding This in the Future

Obviously, I need to double check when I record transactions, and maybe triple check as well. I might even consider linking my personal finance software to my bank accounts in order to get a more up-to-date look at my bank account. At the very least, I need to compare my bank account to my personal finance software more often, just to make sure everything gels. It would only take a few minutes if I did this once a week.

I will also take some cash and keep it in the house. Or at least in a more accessible account that I can get to immediately. That way I don't have to borrow from my parents.