When the figures just don’t seem to add up, it’s time to get out the microscope and scrutinise every single expense in minute detail. It is only by doing this that you can understand what really is happening and take steps to superglue those unwanted money leaks. Before doing this, we are already assuming you have that impulsive retail spending urge under control? If not, make that a first priority.
Once you’ve looked at the above, take these steps to cut your costs.
Aim to eliminate bank fees
Just about everyone has an account with a bank, credit union or building society to receive pay or basic benefits, take out cash and pay bills. These everyday transaction accounts charge different fees according to how and when you withdraw your money. With some accounts, withdrawing money at a branch incurs a fee, as does going into the red (overdrawn) or having a payment dishonoured. Using a ‘foreign’ ATM can cost you $2 a time. The key is to match your banking behaviour with the best fee-free banking deal for you. And be mindful, this can often change as time goes along so don’t be afraid to move to a more suitable account or a different bank.
BPAY is not free
A terrific, time-saving innovation, BPAY may be costing you more than you think. Sometimes it can burn a hole in your pocket depending on the number of bills you pay each month and how fees are structured on your transaction account or credit card. Most banks and credit unions accommodate a set number of free BPAY transactions each month then charge after the free threshold is surpassed, while others levy fees on all bill payments. While individual BPAY transactions are seemingly innocuous at 15 to 60 cents each, they add up over the year if you don’t rein them in.
Credit card pitfalls
Be mindful that paying bills with a credit card through the BPAY system can be messy and expensive. Some billers, such as Telstra, do not accept credit card payments through BPAY because they might incur higher fees and charges from the banks for the privilege. If you do make a credit card payment to a biller who doesn’t usually accept credit card payments via the BPAY system, many banks and lenders will treat the transaction request as a cash advance. While the bill will be paid, the credit card holder will attract an additional fee for the cash advance and incur penalty interest on the value of the bill payment.
Incorrect payments costly
Every week Australians send cash via BPAY to the wrong biller or with an incorrect customer reference number. Such transactions need to be recalled by your bank and another transaction initiated to settle the bill. If you’re paying bills by phone or computer, make sure you hit all the right digits on your keypad before confirming the payment. If you get one wrong, a bank trace fee can cost you to recall the funds. Ouch!
Forgotten auto payments
What payments are being deducted automatically from your accounts that are no longer relevant? That gym membership you signed up for and didn’t use? Just because your membership may have expired doesn’t mean the direct debits stop. Tip: some private health funds subsidise gym membership so that’s worth looking into. What about magazine subscriptions? If you don’t read the magazine anymore, why pay $80 or so a year for the privilege? And that seemingly miniscule spending on movie, song and app downloads from itunes and Apple TV? Sure, the costs range from a paltry 50 cents to a few bucks but how often are you shelling out for yourself or the kids? How much per year do you contribute to Apple’s healthy profit?
How many “incidentals” have you written down that are eating away at your bottom line savings? Multiply that across a 12-month period and I bet you’re looking at a three-figure sum. It’s only by noting the visible and not-so-visible fees, charges and spending on your accounts that you can make a real dent in eliminating the unwanted money drain and retain more of your hard-earned money.
Investigating where every last cent of your money actually goes may seem trivial but remember grandma’s wise words – the ocean is made of up many drops!!!