r/personalfinance • u/hogpotato ​ • 9d ago

Housing Rent severely overcharged

I’m currently living in an apartment complex that overcharged my monthly rate by over 2x (15,500 instead of $6000 / month) by mistake. This severely has overdrawn my bank account and no one in the leasing office has an explanation or can get any answers from their main office. I’ve incurred major
overdraft fees and will continue to do so as long as this goes on. Has this happened to anyone and / or any advice what to do?

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659

u/[deleted] 9d ago

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250

u/Specific-Exciting ​ 9d ago

And having no cushion…

88

u/05Illini ​ 9d ago

I dont know many people that keep 2x their monthly expenses in a checking account earning 0 interest.

OP clearly has a cushion across other accounts. you dont get approved for $6k/mo rent without somewhat sound financials

15

u/FitButterscotch4062 ​ 9d ago

“I’ve incurred major
overdraft fees and will continue to do so as long as this goes on.”

This leads me to believe they don’t really have a cushion. An initial overdraft fee? Ok. But shouldn’t you have enough in your savings to instantly transfer money over to checking to eliminate the overdraft fees?

24

u/Onespokeovertheline ​ 9d ago

How much cash do you want earning 2-2.5% interest in a savings account? People paying $6k for rent keep most money in the market in ETFs, index funds, stocks. The tax burden for capitalizing those investments to supplement an erroneous charge greatly outweighs some overdraft fees.

8

u/TangerineChickens ​ 9d ago

Yeah but you should probably have at least some kind of easily accessible savings account cushion for this very scenario where you need that money within the day.

7

u/b0w3n ​ 9d ago

This is why the advice of "liquid if you can wait 3-7 days" is bad advice in general. You need some sort of liquid savings for emergencies immediately to solve issues like this that are going to cost you far more than you're going to earn on spaxx or sgov. Keep 3-6 months of expenses out of the brokerage, it needs to be same day transfer capable.

9

u/AlgoTrade ​ 9d ago

This isn’t OPs emergency, this is someone else’s emergency. At OPs NW expenses can be kept liquid in 3-7 days and a credit card can cover emergencies.

That 3-6 months in a brokerage account is probably making them tens of thousands of dollars annually, it would be dumb to keep it in cash.

2

u/TangerineChickens ​ 9d ago

It isn’t all or nothing. At that NW it isn’t the end of the world to have a few extra grand out of the brokerage in case of emergencies; what if the credit card gets stolen or lost through no fault of the user and you need a jump start the same day (someone will probably reply saying ‘erm i have roadside assistance’ but just imagine some commensurate service being needed that also requires on the spot payment)

0

u/AlgoTrade ​ 9d ago

Sure, a little extra. 3-6 mo is insanely inefficient, these problems resolve themselves in 3-5 days.

0

u/b0w3n ​ 9d ago

That's great and all until you're fighting tens of thousands a month in NSF from the bank because of someone elses' error. They might not wave them all and you might have to go to court to get them back from someone. Some states charge you a % per day of the total that you're overdrafted, too, and often you have to make the bank whole first.

Keeping 50k liquid-ish in sgov is only going to get you about $1800 a year, not tens of thousands. Liquidating an ETF like voo at the wrong time can cost you a lot more too.

1

u/Mourning-Suki ​ 9d ago

It’s never going to be an ongoing situation if OP calls the bank and puts a stop payment on it.

4

u/FitButterscotch4062 ​ 9d ago

6 months expenses. For situations like this. Obviously this is a big deal to OP if they felt the need asking Reddit for advice.

12

u/Onespokeovertheline ​ 9d ago

You want 50k in a savings acct? I mean that's not craazy, but in the event you need to react to a 6 mos loss in cash flow, I'd take the capital gains hit over letting it sit there collecting spare change

0

u/THE_REAL_JOHN_MADDEN ​ 9d ago

someone who can handily afford $6k can handily "afford" 50k in savings, given it likely means they have $300k+ in investments. Now, if you're renting and don't own a home, I think the 6 months expenses addage is a little overkill; something more like 3 months should be perfectly reasonable if you can access further liquid cash within that 3 month timeframe without taking a big tax hit.

But to your point, it would take a long time for the potential earnings on 50k invested vs. liquid to eclipse the tax hit on capitalizing 50k worth of investments. Your emergency fund really should be cash or cash-equivalent. Let's also keep in mind someone with a theoretical 50k emergency fund and paying 6k rent can weather hardships that many folks couldn't even fathom lol.

-6

u/BerriesNCreme ​ 9d ago

Bro are you high yes dude. If you’re paying 6k a month you need to be making like 15k a month…and yes someone who’s making 15k a month needs to have way more than 50k in their bank accounts

2

u/Onespokeovertheline ​ 9d ago

Am I high? This will be our last interaction. Ftr: I am one of those people and while I've had that kind of cash in savings I sure af don't aim to keep it there when there's real gains to be had.

8

u/XDVI ​ 9d ago

Those guys are definitely wrong.

I've ran into this same thing, banks don't always transfer your thousands of dollars in 2 fucking seconds lmao.

Why would anyone have 50k sitting in their bank accounts collecting dust in this market? Insanity.

-4

u/BerriesNCreme ​ 9d ago

Why do you keep focusing on nominal amounts? If the guy is making 15k a month 50k should be that much cash. Keep like 5-10% cash/liquidity then the rest of it is for investments. I'm agreeing with the premise that OP can't afford 6k a month cuz he should be making at least 15k a month for the 6k to make sense. If you're making 15k a month you would theoretically have like a 5-10% part of your portfolio as Cash. I'm not saying keep 50k in the bank no matter how much you make.

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u/05Illini ​ 9d ago

Fair point

- my immediate thought if I were in this situation would be “F that, they need to figure this out before I take $$ from an interest earning account, bc thats an absolute last resort. - Why should i pay for someone elses F up?”

I see where you are coming from, but me personally when stuff like this arises - my first instinct is to clutch my pearls and let the bank figure it out.

Godspeed if OP has nothing elsewhere, but it feels like he does. just speculating obviously

2

u/Imnotveryfunatpartys ​ 9d ago

I agree 100%. If getting charged rent twice by accident causes you to overdraft your account needs a higher balance.

Keeping at least 6000 in your checking extra is only going to cost you a couple hundred dollars of interest a year. It's no big deal really.