Much of the time, it’s easy to overlook fees. They seem rather small, and it doesn’t seem as though they will have a big impact on your finances. However, you do want to watch out for them. Over time fees can add up, eroding your wealth and even resulting in a little missed opportunity.
Are You Paying these Common Fees?
First of all, take stock of the fees you are paying. In some cases, as with many investments, you can’t avoid fees altogether. However, you can reduce the fees that you pay with a little looking around. Here are some of the more common fees that you might be paying:
- Bank Fees: From monthly maintenance fees to ATM fees, banks often charge fees. Check your statement to see what fees you are being charged, and then compare those fees with other options available to you. If you are paying $9 a month for something you can get free somewhere else, you are putting money into someone else’s pocket, instead of using the money for your own purposes. To stop paying bank fees, consider President’s Choice Financial or ING Direct. You can even get $25 when signing up for ING Direct by using this Orange Key.
- Overdraft Fees and Interest Charges: Other fees that you have to consider are overdraft fees and interest charges. When you overdraw your account, it costs you in terms of fees, and even if you have overdraft protection, you might still pay interest on the balance. Your credit card interest charges can also be a big issue; carrying a balance means you are enriching someone else, rather than using the money to your advantage. Pay off your credit card each month, and live within your means so you don’t end up with fees and charges.
- Investment Fees: There are numerous fees you can pay for investments. Mutual fund fees come in all shapes and sizes, and you can’t escape transaction fees. However, you can reduce the fees you pay. Index funds and ETFs come with low fees, so you can save a great deal. Also, you can look for online discount brokerages with lower transaction costs. There are many that have fees of between $4.99 and $7.99, so you don’t have to pay as much. If you want to make the switch, you can use this Questrade promo code to get $50 in free trades.
Look through your accounts, and your finances, and look at what you are paying in fees. Add it up, and consider the cost over time. Over time, the fees you pay can easily add up to thousands of dollars. This is money that you aren’t investing and earning a return on, so it adds up to lost opportunities as well as money that you pay to someone else. Consider the amount you could have in a couple of decades if the money you were overpaying in fees could be invested and earning interest over time.
Consider your situation, and consider the fees you pay. Chances are, there are ways to reduce what you are paying, and instead put that money to work on your behalf. Before you accept fees, find out whether or not you are really getting the best deal, and look for ways to reduce your costs. You’ll be richer in the long run.