When 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.
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 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.
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?**