A major challenge many face in personal finance management is figuring out how to save money. It doesn’t take a genius to understand that to save money you must find ways of spending less. To do that, you need to cut down on your monthly expenses.
Fixed expenses tend to remain the same month-to-month and may be difficult to cut down. But there are some components of your budget that you can manage better if you are careful.
You can avoid paying some fees and use the money to finance other needs. Here are four kinds of fees you can cut from your life:
1. Credit Card Fees
Banks that issue credit cards can charge you a number of fees. These may include interest charges to over-the-limit fees and some others, depending on how you use the card. Most of these fees can be avoided if you use your credit cards responsibly.
Credit card late fees are charged when you owe outstanding payments past the due date. You can avoid this by making timely payments. Also, many credit cards charge an annual fee, balance transfer fees, late payment fees, and over-limit fees. Check for cards that offer no annual fee or waive some additional fees to save a tidy sum.
Most importantly, pay your card balance off each month to avoid getting stuck in a money-guzzling interest-rate cycle. Making your payments on time can also help alleviate many of these fees and penalties.
2. Banking Fees
Most of us are unaware that we pay various types of fees to our banks for using our own money. Check your bank statement closely and you will likely notice a “fees deducted from your account” description. Some of these are account maintenance fees, overdraft fees, physical statement fees, and so on. You can avoid some of these fees by choosing a debit card that doesn’t have so many traditional fees.
Most of us pay ATM fees because of the convenience of using an ATM outside our bank’s network. This fee can be easily avoided by identifying ATMs that are within your bank’s network. Also, you’ll want to know your bank’s cash withdrawal limit.
While there’s no fee involved for (attempting to) exceed it, it’s still something to keep in mind. If you need $500 for a cash transaction and your bank’s limit is $300 per day, you’ll have to time your withdrawals accordingly.
Even though your bank account may have sufficient funds, your bank may likewise put a limit on daily spending. As with ATM withdrawal limits, this is usually for security purposes. In the event your card is stolen, it will prevent the thief from trying to clean out your account. So be mindful of the debit card daily spending limit that is set by your banking institution.
These are some other factors that you must keep an eye on. Maintain a minimum balance in your account at all times to avoid being charged an account maintenance fee. Better still, look for a debit card with no monthly fees and no minimum balance requirements.
3. Mobile Phone Fees
There are a few hidden/extra charges your mobile carrier could slap on your bill every month. Be sure to check your bill carefully to flag any fees that seem out of line with what you signed up for.
Some of these charges/fees are unavoidable, like taxes. But some can be avoided if you pay close attention. If your focus is on saving money, you can find a provider who charges less for some extras and penalties.
Some fees on your mobile bill are administrative fees, taxes, surcharges, excess data usage fees, roaming fees, and so on. A few of these are small charges and often overlooked. However, when you keep paying those fees, it can add up to quite a hefty amount over time.
Check what these fees mean with your provider. See if they are really applicable to the plan you have signed up for. If there is another plan that gives you the same features minus those extra fees, go for it.
Most postpaid plans come with contracts that do not allow you to change plans. At the same time, providers are free to charge fees and even hike them on a whim.
Using a prepaid plan is a simple way of avoiding these complex charges. There are a few drawbacks here, like paying more when you use excess data inadvertently. However, by being an informed user, you can remain in control of your mobile spending and avoid unnecessary fees.
4. Trial Period Subscription Fees
Many services, like streaming, apps, or subscriptions offer a free trial of their services for a limited period of time. It is a smart way of marketing while providing potential customers the opportunity to experience their offering firsthand. The problem begins when people forget to cancel their subscriptions.
Most services collect the bank and/or card details of subscribers beforehand along with their personal details. When people forget to cancel their free subscription, the system automatically registers them as regular subscribers. This is a standard arrangement that you will be made aware of when you sign up for the free service. However, it will be mentioned in the fine print, and hence you may not notice it.
How can you save the fee on unwanted subscriptions to such platforms? Set an alert on your calendar or mobile phone for a couple of days before the free trial ends. Then, you can cancel before getting charged.
Remember to pay close attention to how long the trial period lasts. If it is for one month, that means 30 days, not necessarily 31. If you subscribe on October 15, the subscription won’t end on November 15 as October has 31 days. You will be over one day which will trigger an auto-debit.
Individually, these fees may seem like a small amount to be worried about. Collectively, they become a major amount every month. They could even add up to a few hundred dollars annually. Make sure you identify these fees and apply the suggested measures to save some money.