One expense that I remember really catching me by surprise once I started tracking was banking fees. I’m not sure why it surprised me, because I saw them come out of our bank accounts every month. I guess it was just one of those insidious expenses that I saw, but didn’t really notice… partly because they were just a bunch of relatively small amounts. And yet, on average, we were spending over FORTY dollars a month just for the ‘privilege’ of banking!!
Once I realized our banking fees were this high, I set out to figure out why (and yes, I realize how stupid it makes me sound that I didn’t even know what we were paying for). G’s banking fees (we have separate banking accounts) were straightforward – Royal Bank charged him $10.95 at the end of each month for a basic savings account. My fees were a little harder to figure out. Assiniboine Credit Union charged me 2 separate amounts at the end of each month, each amount fluctuating from month to month.
One amount related to my $5K ‘overdraft’. This wasn’t even a ‘for emergencies only’ overdraft – no, I just used that overdraft as though it was totally my money. I was always in the red – in fact, most paydays I didn’t even get over $0. Funny enough, I never thought of this as real debt (again, stupid, I know). I still remember calling ACU one day, and they asked me some security questions, including whether or not I had any debt products there including lines of credit or mortgages, and I actually answered that no, I didn’t. I remember being surprised and kinda annoyed when they explained that an overdraft was debt… Anyhoo, back to the story at hand… Because I was nearly always in the negative, I had to pay interest on that overdraft at the end of each month. The amounts varied but averaged around $15/month.
The other amount was the cost of my chequing account. It turns out that for years and years, I had just a basic chequing account that according to their website, is ‘ideal for anyone who performs four transactions or less per month’ – so, in other words, is total f*n garbage ’cause who in the world makes less than 4 transactions a month!! This is a ‘pay as you go’ type of account where you pay for each transaction you make, which is why the cost fluctuated from month to month. This also averaged about $15/month.
As a side note, let me say that although I completely understand that the blame lies with me for being so idiotic & never looking into what I was paying for for years, I was still EXTREMELY pissed with ACU for NEVER suggesting to me that maybe one of their other many types of chequing account would better meet my needs (given recent news about the banking industry, I guess this really shouldn’t surprise me in the least).
Aside from those fees, there were other miscellaneous fees for ordering cheques, and using ATMs that weren’t part of our banks’ networks.
Once I realized what we were paying for, I knew we could do much better. So G and I opened up FREE bank accounts with PC Financial. Sure, it required some legwork (opening new accounts, switching over our direct deposit info for pay, taxes, etc, and our automatic bill payments, then closing our old bank accounts), but knowing that we weren’t wasting any more $ on something that added zero value to our lives made it well worth the effort. Closing my old ACU account forced me to pay off my $5K overdraft, eliminating $5K of debt. And we now get free cheques (yes, we still use them now and then), and free banking!! And just to solidify that we were doing the right thing, both RBC & ACU were asses to us when we closed our accounts. Needless to say, we haven’t looked back and have been very happy with PC so far.
I expect that the only banking fees that we’ll be left with now are the odd ATM fees, although we’re much more careful now about only using machines within PC’s network. So, these changes will save us about $40/month. And although that isn’t a huge amount of money, it is somehow very satisfying to know that the banks are no longer sucking us dry…