I used to have a pretty good relationship with my bank. I always met my minimum balance and never bounced checks, and in return they took care of my money. Or so I thought.
I recently noticed they had started automatically deducting $8 from my checking account every month. Why? Because I don’t have direct deposit. While I’d love to have steady money deposited automatically into my account monthly, I’m currently self-employed—which means I don’t get paid regularly by one employer. So my bank was basically levying its own self-employment tax.
I called them up and demanded they waive the fee. They couldn’t, but could transfer me to a different account so I could avoid the fee by keeping a much higher balance (which I probably won’t be able to maintain). Fine, I said.
In the process, the customer service rep on the phone all but scoffed at me for obsessing over a measly $8. I guess most people just accept it. But to me, it was about principles. I’ve given up a lot of little luxuries lately—regular haircuts (I used to joke that I couldn’t remember what my natural hair color is—now I know…it’s brown), manicures, name brands and my favorite coffee shop. With $8, I could be treating myself to a couple mochas or a lunch away from my desk. Instead, it was just getting tossed away. I wouldn’t burn 8 bucks—so why should I be OK with having my bank take it?
Once I got fired up about the bank fee, I started inspecting my statements more closely. I realized I’d been throwing away a lot of money. There was a $9 monthly fee for a business website—which I never set up. Another $10 was going to Netflix each month—even though I still have an unwatched DVD I received before Christmas. I made some cancellations, and with one fell swoop, saved $30 a month. That adds up to $360 a year. Not enough to make me rich, but no small change, either.
If there’s a moral to this story, it’s to check your bank statements. And your credit card statements. In fact, don’t pay anything without reading the fine print. You don’t know what someone is trying to steal. You have the right to every post-tax penny you earn. Anything you save—no matter how small—will pay off in the future.
If you really want to make your savings work for you, pay off your debt first. When you make minimum payments on your balance—usually just 2% of the total—you’re mostly paying interest. Since creditors are probably charging you 20% interest annually, you might not ever touch the principal (the amount you charged in the first place)—meaning you could be paying your credit card company for the rest of your life! The more you pay over the minimum each month, the less interest you will pay in the long run—and you will spend less years of your life paying it off.
Saving money is a challenge as it is. It doesn’t make it easier that bank and creditors will stoop to any level to squeeze more interest and fees out of you. If you’re looking for an ally in the fight to keep your money, you’ve come to the right place. Sign up for our personal debt evaluation and we’ll come up with a plan to get you out of debt. So your hard-earned savings can stop flowing into the greedy hands of banks and start going into the pockets of your family—where it belongs.