Wise Bread Picks
Reports showed that banks made $38 billion last year, which sounds beyond ridiculous. But there also hasn't been an easier time for us to eliminate all these fees either. Instead of being upset about an overdraft fee, why not just try to avoid the fees all together? After all, not losing money to a corporate giant is even better than making that same amount when you consider taxes and everything. And the joy of using the system against the banks? Priceless. Here are a six suggestions:
Make Everything Electronic
One of the reasons people get dinged with fees is because they try to manage their finances in their heads. All the bills, income, cash flow, charges, budgeting, and savings are done as they come. If you can make everything electronic, where you can schedule all payments via online bill pay (or better yet, pay them as soon as they come in). Then there's a much smaller chance that you will forget and incur late fees. (See also: How to Set Up Automatic Payments)
Simplify Your Accounts
Another gotcha is all the accounts that people have. If you have one account where every payment originates, and if that account is also where your paycheck is going, then it's much easier to keep track of. If you want to be even more on top of your finances, try to use the same method to pay all your bills. If you like to use your credit card, then use it to pay all your bills. If you like the online bill pay method, then use that. You might lose out on some credit card rewards if some of your bills don't accept credit cards as a payment method and you have to switch everything to bill pay, but if you can't keep track of your expenses, any benefits from those rewards are lost anyway.
Keep More Money in Your Checking Account
Or to put another way, know how much money you have and don't spend money you don't. No matter how much money you have (or want to keep in that account), you need to be aware of your balance when you make a withdrawal. It sounds obvious, but the only way someone gets charged an overdraft fee is if a withdrawal is made for money they don't have in the account. Many people actually get charged these fees not because they don't have enough money, but because they move too much to other accounts. If this is you, consider that the 1.5% interest you most likely get from that $1,000 in your savings account is only $15 a year, and after taxes, it is even less. Is it really worth the hassle?
Avoid Monthly (or Maintenance) Fees
I truly believe that the reason why banks have so many different types of accounts is to confuse us and make more money. If you are still paying monthly fees for just having an account, you can go to your branch and ask them for ways to eliminate them. It might require a different account or getting your statement electronically. If you are told there is no way to eliminate your fees, just find another bank! (Here are 3 more reasons to switch banks.)
Schedule Your ATM Withdraws
I would tell you to use your credit card for everything, but as statistics show, most people can't be trusted with one! If you are the cash type, a little planning ahead can help you avoid withdrawing from an ATM that's out of network, incurring charges. Doing so might even help you manage your money better and help you save. But if you are adamant about getting cash anytime and anywhere, why not find one of the checking accounts out there that will refund your ATM fees? ING, Charles Schwab and E*Trade all have one.
Seriously Consider an Online Savings Account
You won't be reducing your fees with this one, but you are probably wasting too much money by having your money sitting in your traditional saving account. If you haven't looked into savings accounts that are available only online, you are missing out on some guaranteed higher interest rates. Here are some of the best high-yield online savings account rates.
Smack yourself on the head if you don't add any of these five bank-related items to your to-do list today.
