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My Money, My Choices

Gail Vaz-Oxlade is a personal finance writer, television host and radio broadcaster. Every Wednesday, she arms Metro readers with tips to keep spending in check.

Are you and your lazy habits making the banks rich?

If you’re dealing with a bank that’s diming you to death on fees, look around for someone else who won’t.

If you’re taking out $20 from an ATM that doesn’t belong to your bank and paying a $3 fee, 

that’s a 15 per cent charge. It adds up.

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If you’re taking out $20 from an ATM that doesn’t belong to your bank and paying a $3 fee, that’s a 15 per cent charge. It adds up.

The profits banks make off fees and interest are astounding. And you know what? You’re probably contributing in no small way to that profitability with your penchant for using credit and your apathy towards fees.

First up are all the people who pay ATM fees. I’ve looked through bank statements showing $20 withdrawals holding hands with a $3 fee. Good Golly Molly! That’s a 15 per cent fee.

If you’re usin’ an ATM like a wallet, what’s wrong with you? That’s money you could be saving that’s doing nothing for you other than feeding your lazy habit. You can get cash back at the supermarket. You can commit to withdrawing a single amount of cash and NO MORE until the next time you’re at your own bank. Just stop with the impulse withdrawals!

Then there are the dopes that think living in overdraft is fine. I put this down to ignorance because I can’t believe a person with even half a brain thinks it’s OK to always have their bank account in a negative position. It’s not just the monthly fee (if you even have a plan, because I’ve seen some folks paying $5 a day for every day they’re in overdraft), there’s the interest charge too. No, that’s not 1.75 per cent a year ... that’s a MONTH, which translates into 21 per cent a year.

Overdraft was never meant as a cash flow supplement. It was meant for emergencies. If you are always in overdraft it’s because you haven’t yet made friends with a budget. Do it.

I’ve saved my fave for last: people who trick themselves into saving by using one of those “round up” accounts that transfers a little money after every debit card transaction to a tied-in savings account paying a pathetic return.

Do you know you could double your interest if you just shopped around for a better savings account? But because so many people have been convinced that there’s some mystery involved in finding the money to save, these products have become increasingly popular.

Only a total money moron thinks being tricked into savings is better than planning to save. And then when all those debits have bled dollars a day into savings (oh, see it works!) and the auto debit for a car payment or other pre-authorized payment bounces to high heaven because there isn’t enough money in the account, it takes all the money “saved” and then some to cover the extra fees.

If you’re determined to save, you’ll pick a specific amount, create an auto deduction to your high interest savings account, and live on what’s left in your account. No gimmick required.

If you’re dealing with a bank that’s diming you to death on fees, look around for someone else who won’t. Try a credit union. Or one of those online banks that offer a better deal.

And if you won’t do that, at the very least don’t whine about your bank. You have options. Explore them.

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