In recent months, Americans have been mindful of multiple attempts by banks to raise existing fees or introduce new ones. Bank of America’s $5 debit-card fee debacle is an obvious example. But, consumers should not forget that there are other expenses that deserve the same attention.
The tenacity and aggressiveness in protesting against changes in bank products and fees was understandable — we want to pay as little as we can.
Last year, Chase hit me with a $6 monthly maintenance fee on my checking account. In the grand scheme of things, it was not a big deal — but I was still upset that I had to pay it when it could have been avoided.
If the notion of paying an extra $5 monthly fee is infuriating, where is that emotion when we know that we can reduce a monthly expense by $5?
I asked myself that question and took action.
Do little, save big
As a way of celebrating National Financial Literacy Month, I re-read some of my favorite personal finance books and actually acted on some of the advice given, which wasn’t as effective the first time I read them two years ago, when my finances were miniscule.
One concept that really struck a chord with me was to focus on small actions that yield big effects, which is emphasized by Ramit Sethi, author of I Will Teach You to Be Rich.
Sethi believes that savings ventures such as eliminating the daily $5 latte won’t work, because it involves a repetitive test of willpower against walking into the Starbucks everyday on the way to work. It may work for a while but sooner or later, the habit will return.
However small actions such as cutting down on subscriptions and memberships is one way to create a big financial change with a small action, so that’s where I started. The instant that I finished that particular chapter of the book, I began reviewing the options for my plan of action.
A quick review of recent wireless-phone bills already revealed there was an excess of minutes even under a family plan — an easy downgrade for $15 in savings. Another short haggling session with the broadband cable internet company meant $5 in monthly savings (I was paying the full post-introductory rate).
Money is money
In total, one minute on the Internet and 10 minutes on the phone resulted in $20 in monthly savings, or $240 in annual savings.
Bank of America’s would-be debit card fee was small compared to those savings. Reviewing my favorite personal-finance books delivered a wake-up call that there are more-costly issues that need to be addressed.
There should be no difference between the $5 monthly fee for a debit card that used to be free and an unnecessary $5 monthly expense.
Five bucks is five bucks. Either way, I’d prefer it in my wallet.
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