Fees: We all pay them. They’re everywhere. There are fees for using a foreign ATM, for getting cash back on your debit card purchase in certain stores, for paying a bill online, for paying a bill over the phone; fees are everywhere. For that reason, most people don’t really think twice about fees. What’s two or three dollars here and there? Honestly, two or three dollars here and there is a big deal. Fees matter; and here’s why.
It’s Your Money
Fees matter first and foremost because it’s your money. When you agree to pay a fee, you’re agreeing to become a little less wealthy than you already were. Fees matter because it’s your money and you’re giving it away for a service that might not be worth it.
Fees are oftentimes wasteful. Some are legit – but some are a waste of money. For example, stopping at a foreign ATM when your bank is across the street simply because you don’t want to cross traffic is going to cost you as much as $5 in fees. Do that every time you hit the ATM and you’re paying hundreds of dollars for no reason every year.
They Add Up
Fees are not cheap. They add up. Every time you opt to pay your utility bill over the phone instead of writing a check to stick in the mail, you pay a fee. That fee might only be $3, but that’s $36 per year. When you add that to the $7.50 fee you pay each time you pay your mortgage online because you don’t feel like taking the time to set up automatic withdrawals this month, you’re paying another $90 in fees, which amounts to $126 in fees over the course of one year to pay only two bills.
They’re Often Ignored
Did you even know your 401k account has an investment fee? Did you know it can add up to approximately 1/8 the amount of your savings over time? Did you know that’s a lot of money? No; you probably didn’t. It’s another reason fees matter; they’re often ignored and wealth is lost.
They Can be Avoided
It’s true you can’t avoid all fees. You’re going to pay them sometimes, but you don’t have to pay them all the time. It might shock you to know you might save thousands each year simply by enrolling in online bill pay (it eliminates transaction fees and late fees), by using your bank’s ATM, and even by using cash? You can avoid fees if you do it right – and that’s why they matter.
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