My husband and I have been using the same bank for several years. We have a joint checking account for household expenses and we each have a separate checking account also. The joint account was originally his and my name was added to it when we got married.
The two separate accounts are free checking accounts that we signed up for to simplify some of our expenses and track them better. The money he needs each week for gas and tolls and other miscellaneous expenses goes into his account.
Money that I need for the supermarket and children related weekly expenses goes into my account. The joint account is for the mortgage and all other household bills and expenses.
Since this was originally his checking account my husband prefers reconcile that statement when we get it. I usually track the balance in that account when I am paying bills by using the automated phone line. I handle the other two account statements.
I have been looking for more ways to cut expenses this month so we can stick to our resolution to pay down our mortgage and build up more equity. I was mortified when I saw the amount of fees we were paying on that checking account. This month we paid almost $25.00 in extra fees. I checked back a few months and there have been months that were more than that.
This bank charges for everything. We get charged for every check after a certain amount of checks, we get charged for electronic transfers to our children's savings accounts when we make deposits with their online bank, online banking fees, fees for the bank's ATM machine and larger fees if we use a different ATM machine.
Needless to say we will be using a different bank before the month is out. My husband is going to get the paperwork to change his direct deposit and we will get this taken care of before he gets his next paycheck. He gets paid every two weeks.
I was really surprised because my husband is usually so good with money. It's just that he was so territorial about that bank statement. So I left it for him to take care of like he wanted. I guess it had to do with that account being his from before we were married.
If you have been dealing with the same bank for years out of habit or because of its location, do yourself a favor and take a hard look at your statement and decide whether convenience or habit is really worth the fees you are paying. I'd rather be putting that $25.00 a month toward my mortgage than giving it to a bank for fees.
There are too many banks out there that will give you those same services for free. This is such an easy fix and it can save you a couple of hundred dollars a year in fees. Bankrate.Com compares checking account fees in your area for you.
Go to http://www.bankrate.com/brm/default.asp and click on Checking & ATM under where it says compare local interest rates. Once you choose your state, it will give you a list of banks in your area with their fees.
If you click on the avoid fees category heading it will show you the minimum amount you need to keep in the account to avoid fees arranged from the lowest to the highest. If you click on monthly service fees category it will arrange the list again in the order of the banks that charge the lowest service fees each month.
It also lets you know the insufficient funds fee, ATM fees for their and other ATM machines and whether or not online banking is available for each bank. You can also do the same for savings accounts and CD's and just about any other type of account.
If you are already comfortable with online banking you can save even more by paying your bills online, many banks offer that service now too. Automate the process for yourself as much as possible it does help you to save money.
If your job offers direct deposit, take advantage of it. It will save you the trouble of cashing your paycheck (and spending some of it before you get to your bank) before you deposit it. Taking advantage of your bank's online bill pay service will also save you postage and late fees if your payment gets delayed in the mail.
So pull out your checking account statement and take a good hard look at it. Unless your checking account is already free, chances are that you could do better by doing some comparison shopping. Don't let old habits stop you from keeping a few hundred more of your hard earned dollars in your pocket this year.
According to a recent report by Keynote Systems, the leading provider of online customer experience research services, the three banks that offer the best customer experience for online banking services are National City, Washington Mutual and Bank of America. So if you have decided to give online banking a try you might want to check out one of these banks first.
They were chosen out of a group of ten banks which included: The Bank of America, Bank One, Chase, Citibank, National City, Sun Trust, U.S. Bank, Wachovia, Washington Mutual and Wells Fargo.
Now that you have checked out banks to save money on your checking account, do yourself a favor and check out a savings account. If you don't open one up, you will always be able to give yourself a reason not to save.
I happen to use ING Direct. Their savings account has a 2.35% APY a year. It is the highest one that I have been able to find. Although it is an online bank, it is attached to my checking account so that I can transfer money to it when I need to.
The thing I like most about ING Direct it is the low minimums. If you are like me and need to start small, there are no minimum deposits to worry about. You can open your savings account for $25.00 or less.
Make it a point to save all of your change in a jar all month long and deposit it into your account once a month. It really does work. We paid for both of our children's birthday parties this year just by depositing our spare change into the bank that way every month.
Also if you are leery of the stock like I am (we lost some money in the market a couple of years ago), than you can open up CDs. If you ladder the CDs (open a 1 year, 2 year, 3 year, 4 year and 5 year at the same time).
It is almost the same as dollar cost averaging with the stock market if you keep adding to them over time and then keep rolling them over. There are also no minimums on CDs with ING Direct.
Many other banks have minimums of $500.00 $1,000.00 and more to open CDs. Their rates are a little better but if cannot meet the minimums at this time, this is the way to go. It will help you to make a start.
You can transfer them to a bank with better CD rates once you have accumulated enough money to meet their minimums. As they mature each year you can transfer them one at a time to a bank with a higher rate.
If opening a savings account is not an option you want to explore right now, see if your employer has an employee stock option plan or a 401k you can take advantage of.
You can have the money taken out of your check, usually before taxes, and many employers will match what you put in up to a certain amount. That's a 50% return on your investment. You won't come close to that in the stock market.
If you have been telling yourself that you have time, eventually you will start saving, stop kidding yourself. We all know that tomorrow never comes, life happens, things come up if we keep allowing them to.
I used to tell myself the same thing and something would always come up. It is not going to change until you decide to pay yourself first and make it a priority.
Pretend you are paying a bill that has to be paid then put that amount into your savings account. Save your raise when you receive it. Forget that you got it and put that amount toward your 401k if you have one.
Put that amount in your savings account every pay period. As you pay off your debts, put part of the money you used to use for your debts in your savings.
There many ways to save. Cutting expenses, clipping coupons eat one less lunch or dinner out a week, cut out one cup of coffee out a day and more. Make it a habit to look for ways to save just like you make it a habit to save. The two habits go hand in hand.
None of us know if Social Security will still be there when we need it. If you don't make saving some money every month a priority and a habit now, you might just find yourself with only your savings or lack there of and the goodwill of relatives to depend on when you retire.
Don't wait for that. Check your budget now and see where you can squeeze a few extra dollars from. This is one habit you will eventually be grateful you picked up.
About The Author: Teresa Kaufman - © 2004-2005. All rights reserved
Personal Budgets to Fit Your Lifestyle, Needs and Wants
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A local bank had a big sign "Totally Free Banking." I walked in and said out loud, "How much does totally free cost here?"
Lots of people in line laughed. I was thrown out.
Thanks for the great reminder.
Great site...great information...but one thing is missing. CREDIT UNIONS. Many people have no idea that they are eligible for credit union membership now (it used to be that you had to work for a big company...not anymore). Since credit unions are not-for-profit and they don't have shareholders to pay (they're run by their members), their loan and savings rates are WAY better than most banks!!! If we're talking THRIFTY BANKING, we should be talking CREDIT UNIONS. :-)
I live in Canada and we have our own business. We dealt with the Bank of Montreal for years, personally and so when we started our own business, we automatically used that bank also. The bank charges were about $20 per month for the business account, we thought that was reasonable. One month the charges went up to $80. OOPS, I had missed (or thrown out) the flyer that had come in the previous statement. The bank was now charging PER check that I would deposit, PLUS a fee per deposit (transaction) AND a percentage of the cash that I would put into the deposit (they would take it as a handling fee). It was costing me about $15 to do a deposit of MY money. Plus we would get NO interest on the bank account because it was a business account. I went to the bank, insisted that they reverse the charges ...rediculous... they did....and went to a different bank, opened an account, at a Credit Union, with my next deposit. The Credit Union also gives me no interest on my $ because it is a business account (same thing as the Bank of Montreal). But...for every $250 I have in the bank I get a free check to go through my account. $1000 as the minimum that month in bank equals 4 free checks I can write that month. No charges for depositing MY money in the Credit Union bank. I think that we have probably only spent about $10 this whole year on service charges at the Credit Union.
A friend of mine also has a small business, checked his statement and realized that the Bank of Montreal was charging him about $60 to $80 per month also to have an account there. He has now also changed his account to the Credit Union.
Loans...we had one with the Bank of Montreal. When I switched to the Credit Union the B of M told me that I still had to have an account for our business at their bank for the loan payment to go through each month. (PLUS they would charge for the check to go through the account, on top of the service charge to HAVE the account.) After about 3 to 4 months of an account only used for one loan payment per month I decided that I was going to close the account...surely they could accept a check from me for a loan without me having an account there.... yes, they reluctantly could. They have a inhouse account of some sort that my check each month could go into. All those months of service charges....
Now our business' money is OUR business' money not the bank's money.
Check all your statements carefully. If you have a loan at one bank and are "attached" to that bank, are paying outrageous fees, think clearly and forget the teller or bank manager that are friends of yours. Unless, you LIKE to PAY for fees at your bank that are free with other banking institutions.
We have saved hundreds and hundreds of dollars for our business over the past 4 years by switching banks.
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