Top Money Wasters Part 1 – Fees You Don’t Have to Pay

Hand throwing money into a trash canWhen trying to save money, using specific strategies such as budgeting and cash envelopes is a great way to keep track of your spending and stay accountable for your purchases. However, knowing what you spend on which items and reducing those expenses are two totally different things. While certain fixed costs such as rent/mortgage payments, utilities, and insurance are hard, if not impossible, to control, there are ways to reduce expenses overall by staying alert to common “money wasters.” Fees, both big and small, are one common way that many people waste money.

From banks and credit card companies to warehouse stores, paying fees for services that you could otherwise receive for free is quite common and, unfortunately, all too easy. In fact, many people fail to realize that they even have a choice when it comes to many of these fees. Either that, or they are taken in by the claim that they “make up” the upfront cost through additional savings.

Guess what…most of the time, both are untrue.

Credit Card Fees

Using credit cards can be incredibly convenient and, in many cases, they offer rewards in the form of cash back and other perks that allow people to stretch their money. However, these benefits are only helpful when credit cards are used in the right wayay, which, in part, means avoiding unnecessary fees.

Two of thee fees, annual fees and “payment protection” (or other promotional) fees are easy to avoid by simply choosing your credit cards wisely and checking each month’s statement. Many times, companies offer these are “promotions” which “pay for themselves” but, in reality, they simply make credit card companies more money.

Another detrimental credit card fee is the late fee. While careful management of cash flow as well as tracking billing due dates is a simple solution here, everyone has those times when they simply miss a payment cut off even though they have the money to pay the bill. In this case, most companies will credit the fee back to you if you call and ask, but this is generally a one-time thing.

Bank Fees

Banks, too, often offer packages of “convenience” and “protection” for a small price. The biggest culprit here is ATM fees which most people know to avoid. Another trap, however, comes from checking and savings accounts, usually free ones, which limit the number of deposits and withdrawals you can do each month.

Depending on your accounting practices, paying a monthly maintenance fee may be worth it if you consistently go over the allotted amount of transactions. Alternately, if you carefully track your actions each month and consolidate your transactions, it is possible to stay within the free account’s limits.

Cell Phone Plan Fees

While many financial gurus will tell you to ditch the cell phone to save money, I am of the opinion (and the generation) which categorically disagrees. It’s hard not to have a cell phone anymore, but that doesn’t mean you need to be paying large sums for it each month.

For some people, sticking with a standard call-and-text model is a viable alternative. For others, specifically professionals who need the access, smartphones are, in fact, a necessity. However, there is still a lot of wiggle room surrounding the costs of the plan you use. In certain areas, such as where I live, only a few carriers have adequate signals, which limits switching between them to get the best deal. But if you have the ability, please to shop around.

For the rest of us, it is still possible to look within each carrier for alternate plans and savings. To do this, carefully monitor your usage from month to month, including minutes, texts, and data. Then, optimize your plan at a level that saves you overall.

Here’s an example: my husband and I have found that, in general, we need no more than 1GB of data per month between us. But sometimes, particularly when we travel and lose our wireless access, we go do over that number. However, it is cheaper to pay the one-time $15 fee for the extra GB in that month than to pay an additional $10 every month to have a 2GB plan.

Delivery Fees

Delivery fees may not always seem like much, but if you shop online a lot or order takeout often, they really add up. Yet, with a little work, they are completely avoidable. When it comes to food, choose restaurants like a couponer, foregoing brand loyalty and extending your horizons. Choose places that don’t have delivery fees or who wave them if you spend enough money. You still need to tip the driver, mind you, but there is no need to add to that with a delivery fee. In addition,, many places may offer local coupons that eliminate such fees, so keep an eye out.

Membership Fees

From warehouse stores to online “buying clubs,” the idea of spending a small fee to tap into larger savings is really appealing – it’s also one of the oldest marketing tricks in the book. Think about it, the entire idea of spending money to save money is sort of silly and, though there are some savings to be had through these channels, it is sometimes easier and more convenient to simply shop sales and use coupons at stores and websites that don’t charge entrance fees.

However, if you still wish to capitalize on the benefits that these places do offer, there is a way to do so without paying fees. Places like Costco and Sam’s Club often offer once-yearly free passes. Also,  members can also bring “guests” on occasion. Similarly, online clubs may offer 1-2 month “trial” periods that allow you to check out prices and stock up on the good values before you have to pay for them.

Watching Out for Fees

Avoiding unnecessary fees and other money wasters is easier than you think. Aside from knowing where the danger lies, simply staying alert to your finances and questioning anything that seems excessive can go a long way. Like any money-saving strategy, avoiding fees is all about accountability and control, two traits that also lead to a healthy financial life overall.


**What are some common money-wasting fees that you avoid paying?**

top money wasters

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  • george

    In Central NJ, the utility companies charge fees for online payments, be it a check or credit card. You can sign up for automatic debit, mail your payment or deposit the payment (by check, no cash) in the company’s locked box outside their office to avoid the fees. Personally, I don’t like automatic debit because you may be accidentally short on the debit date resulting in huge over draft fees on both ends – the bank and your utility company. I prefer to mail the payment which is only the cost of a 1st class stamp, always less than fees.

    • Great tips. Thanks for sharing!

    • MisterBill

      Sign up for overdraft protection at your bank to make sure you don’t bounce payments. Chase allows you to use your savings or a credit card. You’ll pay $10 and interest if you use the credit card but it’s a lot cheaper than a bounced check.

      • george

        I’m one of those people who use overdraft and credit cards poorly. Therefore, I canceled all except one card (for emergency use only!). I recognize my short comings and do my very best to avoid temptation.

  • LJB

    my auto insurance company waives the monthly installment fee when you’re enrolled in automatic debit. you have to stay on top of how much you have in your account and when the automatic debit takes place but it works out to a savings of $30-$40 over the course of the year.

    • It’s amazing how much we can save with small changes here and there. Thanks for sharing.

    • Kate

      A lot of auto insurance companies offer $30 discount if you pay for your policy in full (6 months) and I do that because $60 a year is $60 🙂

      • george

        I wish I had the money to pay in full upfront. Since I do not, installments are the only way for me. By the way, practically all insurance companies, not just auto insurance, will give you a discount for paying annually or semi-annually. The only insurance companies that I know of that do not routinely offer discount are the non-profits such as some Blue Cross/Blue Shield plans.

  • AImee

    I like to buy things on Ebay not only because I can get good bargains but I don’t have to pay sales tax and shipping ( lots of sellers offer free shipping). They also have a rewards program called Ebay bucks which works like CVS quarterly bucks. You earn 2% for every purchase and you’ll be able to use it on anything with the exception of buillon, gift cards, car parts and real estate. Important points to consider before purchasing anything on Ebay are seller’s feedback, no sales tax and returns are okay. In December, I bought 2 HP 61 XL cartridges for only $25 which Staples sells for $51.99 plus tax. My husband accumulated $202 on Ebay bucks in March and we got two Fire extinguishers and a 5 tier Honey can do shelf ( for my stockpile) for free. Once in a while they have a special Ebay bucks offer giving you 10% back.

  • Ang In CT

    My son actually likes hot lunch at his school but we pay full price. So, before the school year you get an option to put any x amount on and get a 10% discount. We use the discount to counteract the fee they charge by putting a lot on the account. He ran out faster than we thought but at least we got some of the fee taken care of which is a good thing.

    With respect to club membership. When you go to use that free pass ask if they have any promotions going on. For us it turned out that they had a 14 month deal at $10 off membership from BJ’s plus bonus coupons plus $50 gift card. The coupons they showed us were all for products I wanted to buy anyway so it was great to get the membership. Turns out that the ink I need for the printer I have is there with a bonus black cartridge for the same price I was paying everywhere else. I print a lot of coupons. To me that savings a lone was worth it. As always – do your math. If your savings out weigh all costs then it’s not a bad thing to pay for membership.

    • Kate

      Yes, I agree with the last statement but i pay for membership very rarely when it’s really worth it. As for the ink it’s very cheap on amazon and that’s where i always buy it. $5 for a set is way better than $50.

  • Kate

    I find it unnecessary to pay bills by check or money orders when it’s way easier, faster and cheaper to pay online. You think it’s common sense? You’d be surprised how many people pay $20 for check order plus a stamp for each bill. Money orders are even more expensive ($1-$5 each). If you have to use checks, order it from a third company instead of the bank – you’ll save more than half.

  • EgyptLyn

    I saved a lot of money this year by getting rid of my checking acct. I started the New Year off by buying a BlueBird card at Walmart for my online purchases and then linked in News subscriptions and pay bills too! It’s easy to load (any Walmart register) and there’s no fees! The best part is I can’t spend more than I have as it’s preloaded but since it’s by Amex, I can pay almost anywhere!!

  • Rocky

    For some utility companies and insurance companies, you can do a pay by phone option (the automated option, not by speaking with an agent) and will therefore not pay any online fees, or, postage. For some of these, though, you will need to pay via a checking account, not a credit or debit card, so, make sure to see how your account does it for free, first. Also, make sure to do this a few days in advance of the due date because it may take a few days for the transactions to process through everyone’s systems.
    Also, to keep your payments at a somewhat regular amount, check with your utility companies for installment plans that even out your payments over a yearly timeframe. They first base it on your past year’s actual usage, so, spread out the payments for that full amount in equal installments. Watch, though, because many of them will then do a mid-year review and your monthly amount may then change (based on your ‘new’ actual usage). This can work out, well, though, because when the electric is higher in the summer months, the gas is lower, and, vice versa. So, over the course of a year, these two can equal out.