3 Top Budget Busters
Here are budget tips for seniors that will save you money every month.
Bank and ATM fees.
Do you know how much your bank is charging you to use an ATM?
Most banks will not charge you a fee if you use their ATM. That means if your bank’s name is not on the ATM, you are paying to use it.
Many ATM’s are owned by non-bank companies. They are in the business to earn money charging fees. Who ever owns the ATM is charging you to use their ATM.
Here is an example. You bank at Smartbank. They do not charge to use a Smartbank ATM. But you are shopping and need cash. The ATM at the store says, Not So Smart Bank on it. You use your ATM card to get $40 from the ATM.
Not So Smart Bank is charging you $3.00 to use their ATM. Why? The short answer is, because they can. The better answer is, they have ATM’s for the convenience of their customers. To pay the expense of placing the ATM in the store, they charge a fee to those who are not their customer.
The other example is the ATM owned by Acme ATM. They only own ATMs and are not a bank.(this is a fictitious company) They generally make deals with gas stations and convenience stores to place the ATM there.
Acme ATM Charges everybody a fee.
It gets worse. Your bank is going to be charging you a fee for using the ATM for both Not So Smart Bank. and Acme ATM. Fees are not all the same but it will probably be in the two to three dollar range.
This means you spent $5 to get your $40. Was it worth it? What if you did it every week? That’s $20 a month hole in your budget.
Think of this way. Let’s pretend you have three adult children. Every year you send them $50 for their birthday. That’s $150 a year in birthday money.
If you don’t use ATMs, you have saved $220 a year in fees. More than enough to cover all the birthday needs for your children.
Many seniors can not afford a budget leak of $220 a year. How about you?
If you still have a telephone landline into your home, you are probably wasting money. For seniors the idea of a home phone seems right.
And for most of their lives, it was. The cell phone was only invented in the 80’s. Most people didn’t have one until the late 90’s. Before then it was reserved mostly for cars.
Do you remember having a curly cord that could get wrapped around the steering wheel? How about the thin antenna attached to the back window.
Today you can have a cell phone for $35 a month with unlimited calls. Did you know there is no such thing as long distance when you use a cell phone?
Major retailers such as Walmart have plans that do not require a contract. Pay the bill every month and that’s it. Want to quit? Just stop paying. Want to change plans? You can do so without fees.
An example would be setting up your plan with a credit card. Each month on the same day, the credit card gets charged the monthly fee. In this example the amount is $35.00.
Don’t like the credit card choice, or you don’t have a credit card? No problem. Buy a prepaid card every month for the service. Retailers such as Walmart will walk you through the process.
For many, the cost of buying the phone is worse than the monthly bill. If you’re financially challenged, (nice way of saying you don’t have the money) check into a program like Lifeline. Here is a link. Click it to learn more. You just may qualify for a free cell phone and service.
Should you not qualify for a free phone, your savings with a cell phone will come when long distance calls are eliminated. With a cell phone, you can call the kids as often as you choose.
Misusing balance transfers can be a cash drain on any account.
Those that can least afford it are often seniors living on low fixed incomes.
The transfers can occur in two areas. Some banks charge a fee to move money from one account to another. While it is not common, it can affect certain bank accounts.
If this sounds like your bank, check into making a change. Have a talk with a personal banker about how to avoid transfer expenses.
The more common expense in transfer fees involves credit cards. Visa and Mastercard have cash advance and cash transfer features. Both involve fees. Used often the fees add up.
Step one, do not pay credit card balances with an advance from a credit card. It doesn’t take long before fees and interest charges will consume you.
Cash advances from a credit card are not billed like a purchase. Often a fee is charged immediately and interest charges begin at the time of the advance. A transfer of cash from one card to another is treated the same way.
Did you know that those checks you get with the monthly statement are an easy way to use your credit card to pay another bill?
It’s a cash advance. It is accumulating interest, even if you plan on paying it off at the end of the month. It’s a budget busting fee you can avoid with a little planning.
Credit cards are good to have and are almost a necessity. It’s hard to rent a car, book a trip or check into a hotel without one.
Step Two, Use caution with credit cards. Don’t allow balance transfers and cash advances to create leaks in your budget.
A final word about credit cards. There is a scam that takes place in some large retailers. It involves employees who don’t mind stealing from you.
Always look at your receipt before leaving. Some clerks will add a ‘cashback’ charge to your credit card. If you don’t notice it, the clerk will pocket the extra cash.
Not sure what ‘cashback’ is? It is an option on credit and debit cards for receiving a ‘cash advance’ when checking out at a retailer. It works like an ATM but you conduct the business at the checkout counter.
Here’s an example of how the scam could work.
Your final bill is $68. You may have the idea that it sounds high but you have several bags. You swipe the card. Actually what happened is your bill was $58. But the clerk adds $10 to the bill as cash back. After you leave without the $10, the clerk can pocket the $10 ‘cashback’ amount.
Budgets are important. For seniors they are vital. These three simple fixes can make a difference. Think of leaks in your budget like a leak under the sink. Even when it’s just a slight drip, after awhile, it makes a mess.
It’s been said many times. Manage your penny’s and the dollars will take care of themselves.
Money management is important. Use these budget tips for seniors. Fixed income seniors need to make it a priority.
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