Audit a full month of your bank and card statements and decide which charges to stop.
To find the fees you pay without noticing, put every charge from every bank account and card for one month into one table. Then work out what each avoidable charge costs you in a year, and stop the largest one while the statements are still open. If you fix one account at a time, you miss charges spread across all of them. Allow about 25 minutes. Seeing one month in a single view gives you the full picture and lets you choose which charge to stop first.
Marcus thought he had dealt with fees. During this module he fixed his salary bonus and set up full-balance GIRO on his main card. Then he remembered three things he had not checked. He had an old savings account from his student days and a second credit card he rarely used, and he sends money to his brother in Melbourne every few months.
You need every bank and card statement you hold for the same calendar month. Pick a recent full month. Include each savings and current account, each credit card, and any other account that charges fees, such as a multi-currency wallet. Include the accounts you rarely use, because fees go unnoticed where nobody opens the statements. Marcus picked March and downloaded four statements: his main savings account, the old student account, his main card and the second card.
Go through each statement line by line, and use what lessons 3.1 to 3.4 taught you to recognise charges. Look for fees, interest charges, finance charges, foreign transaction fees and annual fees. For each one, record the account, date, description and amount. Also record anything you expected that is missing, such as a bonus interest line that did not appear, because it costs you money the same way a fee does even though it is not a fee.
Next to each charge, note its charge frequency:
monthly, such as a fall-below fee yearly, such as a card annual fee tied to an action, such as a fee each time you make a transfer
Marcus's March list had four items. The student account charged a S$7.50 fall-below fee every month (an example figure). His main card charged three foreign transaction fees for overseas subscriptions: S$0.52, S$1.10 and S$2.38, totalling S$4.00. Sending money to his brother cost a S$20 overseas transfer fee, which he pays about once a quarter. The second card charged its S$196.20 annual fee, which comes once a year, in March.
An avoidable charge is one that some change would stop. That change might be closing an account, asking for a waiver, cancelling, or switching to another method. Mark each charge avoidable or not, and for each avoidable one write down the change that would stop it. If you are unsure about a charge, mark it to check. Be honest about fees you would keep: some fees buy something you want, and paying them is fine if you have chosen to pay them on purpose.
Marcus marked the fall-below fee avoidable. The student account served no purpose, so he could move the balance and close it. He marked the annual fee avoidable too, since he barely used the second card and could ask for a waiver or cancel it. The foreign transaction fees were not easily avoidable for now, because the subscriptions were charged in US dollars. He marked the transfer fee "check". There are other ways to send the money, but lesson 3.4 showed that comparing ways to send money abroad means looking at the exchange rate as well as the fee, so he would look into it before deciding.
Put a yearly cost on every avoidable charge, using its frequency. Multiply a monthly charge by 12. Count a yearly charge once. For a charge tied to an action, multiply it by how often you do that action in a year. Then add the yearly costs together to get one total for all your avoidable charges.
For Marcus, the fall-below fee is S$7.50 x 12 = S$90. The annual fee counts once, at S$196.20. His avoidable total is S$90 + S$196.20 = S$286.20 a year.
A common mistake is to take the month's total and multiply it by twelve, which works only for charges that happen every month. Marcus's avoidable charges in March came to S$203.70 (S$7.50 + S$196.20), and S$203.70 x 12 = S$2,444.40. That figure is more than eight times too high, because it counts the annual fee twelve times.
The yearly figure makes the decision feel real. A small monthly amount such as S$7.50 is easy to ignore, but the annual total is harder to ignore: ninety dollars a year for an account Marcus never uses.
Rank your avoidable charges by yearly cost. Make the change behind the largest one during the exercise rather than adding it to a to-do list. A call, an app setting or a form usually takes under fifteen minutes.
Marcus's largest avoidable charge was the S$196.20 annual fee. He called the bank and asked for a waiver, and decided to cancel the card if the waiver was refused. He also scheduled closing the old student account for the following week.
When you finish, you have one table covering every account for one month. Each charge shows its frequency, whether it is avoidable, the change that would stop it and its yearly cost. At the bottom is a correctly calculated yearly total of avoidable charges. Below that is a note of the one change you have already made and the date you made it. Keep the table, because the final project builds on it, and next year's version will show whether your changes stuck.
Your own month comes next. The most useful part is the step people skip: actually making that first change before you close the statements.
Do the fee audit for one month, then make the one change that gets rid of your largest avoidable charge.
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