Saturday, December 24, 2011

 Controlling Hidden Costs

Sometimes we spend money without realizing it. Or we don't really think about the long-term cost, or simply accept it as the price of convenience. Here are a few tips to controlling those hidden costs, and changing your mindset.

Avoid ATM Fees

ATM fees can really add up without us noticing. Some banks, like Wells Fargo, charge their customers $3 every time they use an ATM that isn't affiliated with Wells Fargo. Then they turn around charge customers from other banks $3.50 to use their machines. So in essence you are charged twice (sometimes more than $6 total) for the privilege of withdrawing your own money. On one vacation, to a destination where my own bank didn't even have a branch, I accrued $32 in non-branch ATM fees (that's just the fee MY BANK charged me—it doesn't include the fees charged by the ATM).

It's our own fault, really. It's not like that non-branch ATM doesn't warn us that it's going charge us $3 for the transaction. But it's so easy to convince yourself that $3 isn't all that much, considering you don't have any cash and don't really want to run clear across town.

But think about it. If you use a non-branch ATM just three times a week, and are charged $6 total for each transaction, that's $72 a month. $816 a year. Over five years, you'll have spent $4320. That is the true cost of convenience.

I don't know about you, but I can think of a few things I'd rather spend $4320 on.

Pay in Cash, Collect Change

As any ordinary beggar will tell you, change can really add up. But when it's riding in your pocket, you don't think much of it, do you? Once a paper dollar has been rendered into a few odd coins, we don't seem to count it anymore. I know I don't. When I'm out and about, I count the bills. The change is just a jangly weight in my pocket. It could be $11 in quarters…but it coin form, it's just somehow less substantive than bills.

But get a big jar (I use one of those big 5-gallon water jugs) and put your change in it every evening. If you're like me, in a few months, you'll have a hundred dollars or more. What's more, it feels like free money.

You can also earmark it for something. Call it your "New Car Fund", or "Trip To Tahiti Fund."

Grow Your Own Vegetables

More and more people are discovering the benefits of growing their own vegetables. Not only are they better for you (no insecticides) but doing so can save you a considerable amount of money. What's more, you don't need to become Tillamook Bob and plow up an entire acre of land. A small plot is all you really need. In the summer months, eat all of your vegetables free. And if you're really ambitious and have the resources, you can preserve them by canning or freezing. If you're unsure how to do this, look for tips and resources online. You'll be surprised how much money you can shave off your grocery bill. And as the old saying goes, a penny saved is a penny earned.





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