A good portion of my day is spent talking to people about how to save for a down payment. The basics of saving go into all avenues such as retirement, 6-month cushion etc.… I often hear “I have no money left to save”. After looking through their bank statements often I see that they do in fact have nothing left however many are being robbed every day of little amounts that should be going towards their savings. These little amounts that add up to a lot are bank fees. Forget cutting the morning latte, you need to ditch the bank fees.
I was recently looking at a client’s statements and noticed every time she went to the ATM she was paying $3 to that ATM and then her bank was charging her $2.50. Every time she went to the ATM she took out $20 as she was trying to be as frugal as possible with her money. Every $20 she was paying $5.50 in collective fees. When you look at the math on it, that $5.50 was a 27.5% convenience fee. Yes, she was paying 27.5% to take out her OWN money. We went through and added it up and in bank fees for the last 2 months she had spent over $55.
I was curious, I have not paid a bank fee in over a decade and I assumed other banks had followed suit. Wouldn’t consumers demand it?? I started digging through other people’s bank statements with them and talking to my friends about their bank statements. This is not uncommon, and everyone is shocked when I discuss my findings. They had no idea how much they were paying. What is even more amazing is that the news and media have been covering how outrageous these fees are multiple times a year, yet nothing has changed. I came across this fact that I found very interesting from CNN Money. In 2016 America 3 biggest banks (Bank of America, Chase, Wells) racked up more then 6.4 Billion dollars in ATM fees. 6.4 billion dollars! ATM fees are a beyond easy way for banks to make money with very little effort. It is time to start a Revolution.
As a society most people have accepted that if you use an out of network atm you will pay $3 to that atm. In addition, your bank most likely will charge you a $2.50 out of network fee. This is not acceptable. If you accept this, you are accepting giving away your hard-earned money. If you are going to give away money it should go to a charity…not a bank. I am going to let you in on a little secret that was told to me decades ago by my sister Sarah.
Bank with Charles Schwab. Yes, bank with Charles Schwab. They have no checking fees, no ATM fees, refund you if another ATM charges you and they have no foreign transactions fee. It is like a secret because everyone wrongly assumes you must be rich to bank with Charles Schwab. You do not have to be rich. They have no minimum balance requirement. When I started my Schwab accounts years ago I think I put like $50 in brokerage and $100 in checking and that was not even required. You must open a brokerage as well but that also has no minimum balance. I have not paid any form of banking fees in over a decade. There are a few other banks that offer a similar structure, but I have yet to see one as generous to their clients as Schwab.
I challenge you to look at your bank statements. I say challenge because most people assume they are not being charged fees. Check it out. You will be surprised. Don’t give away another dime. Changing banks is not hard and your money deserves to be treated better. You deserve to be treated better. Remember, you need to retire one day, and every dollar taken from you is one step further away.
All my best,
Suggested further reading
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