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10 Practical Tips To Lower Your Banking Costs

10 Practical Tips To Lower Your Banking Costs

Recently, I was going over the details of my budget with a friend. When I got to the estimated expenses, he seemed to have a puzzled look on his face and asked me if I had forgotten to include banking costs. I was surprised by this question, but not as surprised as he was by my answer: “I don’t really have any banking expenses.”

“What about service charges, accidental overdrafts, minimum account balances etc.?” he asked. I shrugged. I don’t pay my bank to hold my money, they pay me for the privilege. Here’s how:

1. Set up overdraft protection … now!

Accidents happen. No one usually intends to overdraw their bank account, but sometimes a debit transaction comes through before a check clears and there you are with one or several charges applied to your already hurting bank account.

The first thing you should do after setting up a bank account is inquire about available overdraft protection. Sometimes referred to as cash reserve checking, this is a line of credit that the bank extends to its customers that kicks in when your debits exceed the balance in your account. Basically, you are pre-approved for a loan that is used to cover your negative balance.

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While this protection virtually eliminates overdraft fees, there are two small caveats. Firstly, you must be approved for such a line of credit, which is dependent on several factors including your credit score and history with the bank. Secondly, banks are not in the business of loaning out money for free, you will be charged interest on the overdrawn amount, though this is almost always going to be less than the fees that would be applied without overdraft protection.

2. Establish a good relationship with the tellers at your bank.

We often tend to view banks as large, faceless megacorporations, and save for the local credit unions, most of them are. That said, the people who work at your local branch are just that, people, and they often possess more power to help you out than you may realize. Knowing your teller by name, asking them about their family and what they are doing this weekend are, other than being generally polite things to do, great ways to ensure that you are treated fairly by your bank. I cannot tell you how many times my teller has pushed a deposit through to clear immediately or removed a fee for me: services that I doubt would have ever been extended to someone they didn’t know.

3. Prepare ahead for traveling abroad.

Oftentimes travelers run into additional banking fees and inconveniences, simply because they didn’t plan ahead. Be sure to tell your bank that you are traveling. Will you need to use ATMs while you are abroad? Check to see if your bank has any arrangements with banks in the countries to which you are traveling. If they do, using these banks can significantly cut down on fees and you can be assured that your money will be readily available when away from home. If you travel frequently, consider opening a Schwab Bank High Yield Investor Checking Account, which automatically reimburses all foreign ATM fees.

4. Use online banking but don’t rely on it.

Online banking is a godsend for most people. It allows you to keep an eye on your balance, transfer money from one account to another, and more. Many banks allow you configure alerts so that you are notified via email or text message when your balance drops below a certain threshold. Get to know what your online banking offers and leverage these tools to stay in control of your account. While this can be an extremely useful tool, bear in mind that it does not replace the need to balance your checkbook.

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5. Balance your check book.

Every time you swipe your debit card or write out a check, add the transaction to your ledger immediately. For all intents and purposes, view that money as no longer being in your account. If you get into this habit and quit relying on the available balance reported by your online banking, you will save yourself a lot of trouble, fees and embarrassment.

Remember that transactions can often take days to show up on your online ledger. Always know what it really in your account. Maintaining a balanced check book will also enable you to more easily spot potential bank errors, such as double charges. While there are a wide variety of apps available to make this age-old act easier, I personally prefer Toshl, which is available on all the major mobile platforms and can also be used to set up budgets and generate helpful graphs about your spending habits.

6. Shop around for better accounts.

Before looking elsewhere, go into your bank and ask to talk to someone about your account. Let them know that you are concerned about avoiding fees and would like to know what types of accounts are available. Answer any questions they ask you with complete honesty. Do not say that you can maintain a higher minimum balance than you realistically can. Oftentimes, you can forgo interest (which is often quite meager to begin with) for a totally free account with no restrictions. After a simple five-minute conversation with my banker, I was switched into an account that is typically just for college students (which I am not) that offered some built-in overdraft forgiveness with no fees and no minimum balance. While your mileage may vary, it never hurts to see what is available. If it seems that your bank has nothing to offer, look elsewhere.

7. Be careful when writing checks.

Checks can be tricky as you never know when their recipient will cash them and if there isn’t enough money in our account when they do, they will bounce, which is costly and very embarrassing. Bounce enough checks around town and you might even find yourself in jail. If we are following tip #5 and balancing our check book, this should never happen. That said, sometimes we make mistakes. So, if you do bounce a check, and you happen to catch it right away (it shows up in your online banking, but the transaction is still “pending”), then immediately deposit enough funds in your account to cover the check and call your bank. There is a chance that they might be willing to manually approve the transaction and prevent the check from bouncing.

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8. Read every notice that your bank mails you.

Regulations require that your bank notify you of any new fees. Be sure to open and read every piece of mail that your bank sends you. If they are introducing a new fee of some type, contact them immediately and see what can be done to avoid being charged. Often they are just hoping that you won’t notice. Stay on top of things and you could avoid increasing fees.

9. Consider switching to a credit union.

If you are unable to get your banking costs under control with a typical bank, try a credit union. Credit unions are member owned and operated and as such, are service-driven as opposed to profit-driven organizations, and because of this they tend to offer more favorable rates and additional services.

10. Don’t be afraid to mix and match your banks.

If one bank offers a great free checking account and another has really useful features for its business accounts, don’t be afraid to mix and match. Find the accounts that suit your needs, regardless of where they are offered.

 

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With a little effort, it is possible to mitigate most banking costs, even those associated with mistakes made on your own part. For a look into some more money mistakes worth avoiding, check out 11 Money Mistakes You Don’t Realize You’re Making.

Featured photo credit: Money Bills Calculator Save Savings Taxes/jarmoluk via pixabay.com

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Published on July 4, 2018

Top 10 Recommendations on Money Management Apps

Top 10 Recommendations on Money Management Apps

Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

The solution is simple, save more and spend less. But, we all know it’s easier said than done.

One problem is finding quality apps that save you time and money, and aren’t just hype.

Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

1. Personal Capital

    When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

    Here are some of its main features:

    • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
    • Discover hidden fees and how much they’re affecting your retirement plan
    • Wealth management for investors requiring a long-term strategy

    With Personal you’re free to track your expenses and net worth.

    Available for: iOS and Android

    2. Mint

      If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

      Here are some of its main features:

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      • Effortlessly track all your bills and balances in one dashboard
      • Categorized expenses to understand where you spend your money
      • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

      Feel at ease with managing your money by a reputable company that isn’t going anywhere.

      Available for: iOS and Android

      3. YNAB

        Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

        Here are some of its main features:

        • Easily sync all bank accounts in one place
        • Visually see your debt paying progress with eye-catching charts and notifications
        • Customized categories setting saving goals

        The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

        Available for: iOS and Android

        4. Wealthfront

          Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

          Here are some of its main features:

          • Variety of investment account options including IRA, Roth IRA, and more
          • Your portfolio composed of 7 different asset classes
          • Automatically rebalanced portfolio
          • Daily tax loss harvesting

          Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

          Available for: iOS and Android

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          5. Clarity Money

            If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

            Here are some of its main features:

            • Easily cancel subscriptions with one click
            • Synchronize bank accounts fast
            • Transfer money effortlessly between different accounts

            Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

            Available for: iOS and Android

            6. Acorns

              What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

              Here are some of its main features:

              • Automatic contribution option
              • Customized portfolio tailored to your needs
              • Low management fees ranging from $1-$2 per month

              Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

              Available for: iOS and Android

              7. Albert

                Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                Here are some of its main features:

                • Receive notifications for overpayments, hidden fees, and low balances
                • An Automatic budget that’s built around your spending and income
                • Easily track debt and set new financial goals

                While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                Available for: iOS

                8. Prism

                  Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                  Here are some of its main features:

                  • View all your account balances in one glance
                  • Bill due dates are automatically pulled and tracked
                  • Receive early reminders for upcoming bills

                  If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                  Available for: iOS, Android, Windows, Amazon

                  9. Mvelopes

                    Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                    Here are some of its main features:

                    • Connect unlimited bank accounts
                    • Real-time budgeting with auto transaction syncing
                    • Low monthly $4 fee or $40 annual

                    Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                    Available for: iOS and Android

                    10. Wallaby

                      Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                      Here are some of its main features:

                      • Automatic recommendations for the best credit card to use for each transaction
                      • A friendly user interface, displaying credit cards with their corresponding images
                      • Free to use

                      If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                      Available for: iOS and Android

                      Take control of your finances and experience financial freedom

                      Picture yourself staying on budget and saving more money than you’d ever imagined.

                      It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                      You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                      Featured photo credit: Pexels via pexels.com

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