9 Fees to Cut From Your Life

I hate paying fees; they cut into our cash flow and they can cost us big in the long run. It’s amazing how fees are charged for everything these days, fortunately a lot of these fees you can eliminate or control.

Here are nine fees to cut from your daily life.

ATM fees – Avoid ATM fees at all costs and stick to machines where you won’t be charged. Those small fees add up. If you always find it difficult to locate an ATM from your home bank then maybe it’s time to consider switching banks.

Account fees – Some banking fees are ridiculous. I can’t understand why banks charge you money to hold your money. Most banks will waive the account fees if you hold a minimum amount within the account. The other simple solution is to use a no fee bank account or a free checking account.

Overdraft protection – Interest free overdraft protection may sound great but it really is a waste of money. Yes you’ll get protection in case you hit a negative balance but why pay a monthly fee just in case this happens? If you’re worried about overdraft protection then you probably have bigger issues to deal with.

Yearly fees – Unless you’re a power user and really like to collect points then credit cards with a yearly fee rarely offer you good value. Some cards will waive the first year fee but then you need to cancel it when your free year is up. Just pick a no fee card that offers you benefits that you can take advantage of.

Sean MacEntee / Flickr

Credit card Interest – Not technically a fee but credit cards have high interest rates. Paying off your full balance on time is a must when using credit, otherwise those purchases you made will end up costing you a whole lot more in the long run. If you’re struggling to manage your credit cards then try switching to a cash only budget.

Foreign transactions – Credit cards charge 2.5-3% on top of the spot rate when you make purchases in a foreign currency. Avoid this by getting a credit card that has no foreign exchange fees.

Investment fees – The management expense ratio (MER) is the fee you pay when you invest in mutual funds. These fees can run as high as 3.5% which doesn’t sound like a whole lot, but in the long run it could cost you 100s of thousands of dollars. You can’t eliminate MERs completely, but you can reduce them by investing in index funds or ETFs.

LKen Teegardin / Flickr

Deferred Sales Charges – Some of the mutual funds you can invest in have a deferred sales charge (DSC) attached to them. What this means is, if you sell your funds before a certain date you’ll need to pay a fee just to get your money back. You should avoid any fund that has a DSC associated with it. Note that brokers do not need to disclose these fees so be sure to ask about them.

Brokerage fees – Brokerage fees are a pretty normal thing but if you really want to reduce your fees consider switching to a discount brokerage that offers lower trading fees.

Final word
Cutting out these daily fees will put money back in your wallet, just don’t forget to put that savings in the bank so you don’t spend it on something else.

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You can follow him on Twitter: @barrychoi

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