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I waste a lot of money. Sometimes it's on clothes or electronics I don't need. Other times it's on my electric bill because I keep forgetting to turn off the lights when I leave the house. Still others, when I pay unnecessary fees for financial products and services.
True, sometimes bank fees are difficult to avoid. More than 75 percent of banks are charging ATM fees, for instance. Even so, there are ways around many of the fees I regularly waste my money on. Here are a few of the ways I've wasted money, and how I'm trying to curb my money-wasting habits.
Paying an annual fee on a credit card I rarely use.
Paying a price for a credit card that rarely sees the light of day is a waste. I'm not saying that all annual-fee credit cards are wasteful. On the contrary, getting something great back for purchases, like airline miles of cash, can make a manageable fee worthwhile. But since I'm an infrequent credit card user, it makes more sense to find a fee-free rewards or cash back card.
Getting hit with overdraft fees.
Banks collected $29.5 billion in overdraft fees in 2011. Each overdraft fee averaged out to about $31. Thankfully, due to a regulation passed in 2010, banks now have to offer customers the right to opt-out of overdrafting. I used to get hit with overdraft fees all the time simply because I ill-managed my bank accounts. Now, I have overdraft protection, which transfers $100 from another account when I accidentally overdraw. Plus, I get an email anytime my bank account balance dips below $25.
Paying for a credit report.
I've only fallen for this trap once, and it was because I didn't take the time to research my consumer credit rights. You're entitled to one free credit report each year from each of the three credit bureaus (Equifax, Experian and TransUnion) through AnnualCreditReport.com. What's more, you may be entitled to additional free copies of your credit report if you fulfill certain requirements. (Check out the FTC's website for more information.) Now I know to spread out my three free reports so that I receive one every four months. In the meantime, I check my credit score at Credit Karma for free on a weekly basis.
Falling prey to ATM fees.
After getting hit with a double ATM fee (one from the ATM servicer and once from my bank), I now have a no-tolerance policy. If I can't find my bank's ATM, I'll go to Plan B: a convenience or grocery store. Most big-chain stores will let you get cash back for debit card transactions. I'll make a small purchase at the store add $20 or $40 in cash back, successfully avoiding an ATM fee.
Paying checking account fees.
Unfortunately, the number of banks offering free checking accounts is quickly declining. By the end of 2009, 92 percent of banks with assets of $50 billion or more offered free checking. By the second quarter of 2011, only 38 percent did. Unfortunately, my bank is one of the other 62 percent with checking account maintenance fees. However, there are still many smaller institutions offering checking services for free, such as Alliant Credit Union, Ally Bank and PerkStreet. I'm doing the research to move my money to a credit union with fewer fees.
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