365 Ways to Live Cheap (5 page)

49 Get a Savings Account That Offers More Than 3 Percent Interest

50 Don’t Tolerate These Four Fees

51 Make Sure the Bank’s Hours Match Yours

52 If You Can’t Get These Features, Start Shopping for a New Bank

53 Opt Out of “Courtesy” Overdraft Protection

54 Learn How to Use Online Banking

55 Balance Your Checkbook as Often as Possible

56 If You Do Overdraft for the First Time, Ask for the Fee to Be Waived

57 Open Up a 401(k) or 403(b) Now

58 Use a Simple Method to Choose Investment Options

59 Contribute Regularly to That Retirement Account

60 Automatically Build an Emergency Fund

61 If You Have an Unexpected Windfall, Put It into a C
D

62 Ignore Freebies Given Just for Signing Up for Financial Accounts

47. G
ET A
B
ANK
C
ARD WITH A
V
ERY
L
ARGE
F
EE
-F
REE
A
TM
N
ETWORK

Ever stood at an ATM and seen that dreaded message “This bank charges a $2 fee for use of this ATM”? If you have, blame your bank. In order to cut corners, they’ve decided to exclude ATMs from their network. Your bank should always have the widest ATM network possible. If you find yourself seeing those messages regularly, that adds up to significant cash straight out of your pocket. Talk to your bank and make sure that you at least have a debit card with a MasterCard or Visa logo on it so you can use it as a credit card. Often you’re able to use it as a debit card in the checkout lane and use it to get cash back.

48. G
ET A
C
HECKING
A
CCOUNT
T
HAT
O
FFERS
M
ORE
T
HAN
1 P
ERCENT
I
NTEREST

If you keep your checking account at a bank that does not offer any interest on your checking account, or offers far less than 1 percent interest, look elsewhere. Many banks offer 1 percent or higher interest rates on their checking accounts, meaning they’ll actually pay you money for just having your account there. Ask if your bank has an interest checking account and switch to that account. If not, you may want to look at tip #52.

49. G
ET A
S
AVINGS
A
CCOUNT
T
HAT
O
FFERS
M
ORE
T
HAN
3 P
ERCENT
I
NTEREST

Similar to tip 48, if the savings account your bank offers doesn’t offer at least 3 percent interest, ask them if there is one available that offers that much. Many banks offer rates at 3 percent or above, particularly banks that focus on online services. If you can’t get a savings account at your local bank offering rates that high, consider switching to one that does and include online banks in that decision. See tip #52 for more details.

50. D
ON
’T T
OLERATE
T
HESE
F
OUR
F
EES

Check your most recent bank statement. Do you see things like maintenance fees, mysterious monthly fees, check cashing fees, minimum balance fees, or other fees that seem inexplicable to you? These fees are unnecessary and cost you money. Call your bank and ask to have them waived. If they refuse, then it’s time to start looking for a bank that respects you as a customer (see tip #52).

51. M
AKE
S
URE THE
B
ANK
’S H
OURS
M
ATCH
Y
OURS

If your schedule makes it difficult to conduct business with your bank and they don’t offer online services to help out with basic tasks, then your bank is costing you money. Every time you can’t get a check cashed, can’t get a transfer set up, or can’t do any other business you might want to routinely do, your bank’s business practices are interfering with your financial life. Don’t accept it. Your bank should have hours that match your schedule and/or online services that help you out with most of these basic tasks.

52. I
F
Y
OU
C
AN
’T G
ET
T
HESE
F
EATURES
, S
TART
S
HOPPING FOR A
N
EW
B
ANK

So, the last four tips identify basic features you should be expecting from your bank. Without them, your bank is costing you money. Most likely, your bank doesn’t have all these things, but there are many banks out there that offer most if not all of these features. Here are some tips for finding a new bank and making the move to a new account.

Use
Bankrate.com
to identify banks with good services. Bankrate. com identifies banks that offer high-interest checking and savings accounts. Click on the “Checking and Savings” tab there to find out all the info you need about your local banks.

Consider online banks like
INGDirect.com
. An online bank doesn’t offer a brick-and-mortar place to do your bank business, but they generally offer all of the services that a bank can offer through their online services or through A
TM
s. Even better, since they don’t have to pay for a physical location, they can offer great interest rates and no fees.

If you decide to move to a new bank, leave your old account open for a while to help with the transition. You may have many automatic deposits and other transfers that you may have for- gotten about, so leave the old account open for a while to catch these. When you’re confident that all of your business has been switched to the new bank, you can close the old bank accounts that were draining your pocketbook and move on with your life.

53. O
PT
O
UT OF
“C
OURTESY
” O
VERDRAFT
P
ROTECTION

Many banks offer a “courtesy” overdraft protection service where they offer to cover any overdrafts you might make, which sounds like a good deal at first. It’s not. You’re usually better off bouncing the check. The program at many banks usually charges you a sizable overdraft fee (usually $35 or so), then charges you a daily fee for each day you’re over ($2 to $10 a day). An overdraft check can quickly rack up as much as $135 in fees if you don’t cover it in ten days. It’s usually much cheaper to just deal directly with the business that you wrote the bad check to. They may charge you a small fee, but if you make it right with them, it’ll usually be far cheaper than paying the fees your bank will charge you.

54. L
EARN
H
OW TO
U
SE
O
NLINE
B
ANKING

Many banks are now offering online banking services that allow you to use your computer to track your account balances, check your recent transactions, and pay bills directly without writing a check. Learn how to use this service, as it can save you money in many different ways.

If you’re unsure of your account balance, you can log in and check your current standing and recent transactions, which can save you from an accidental overdraft.

If your bank offers online bill pay, you can save money on stamps. If you can move ten monthly bills from paper checks to online bill pay, that’s a savings of $4.20 every month.

You can avoid late fees by scheduling your regular bills to be paid automatically. No more remembering to pay a bill on time.

55. B
ALANCE
Y
OUR
C
HECKBOOK AS
O
FTEN AS
P
OSSIBLE

If you’re not ready to make the move to online banking, you should definitely make sure to balance your checkbook every month, as it can save you from a potentially devastating bounced check or overdraft fee. It’s really quite simple; just make sure the statement your bank provides matches your own records. Find a point where you’re sure both are right and work forward from there, making sure each payment is accounted for by both you and by the bank. As long as your records and the bank’s records stay in alignment, you can be much more confident that you won’t “accidentally” overdraft.