You will audit a full month of bank and card statements and decide which charges to stop.
By the end of this module Marcus had fixed his salary bonus and set up full-balance GIRO on his main card, and he felt he'd dealt with fees. Then he remembered he also had an old savings account from his student days, a second credit card he rarely used, and a habit of sending money to his brother in Melbourne every few months. None of those had been part of any check.
Fixing one account at a time misses the charges spread across all of them. This exercise puts every account in one view for one month, so you see the full picture and can decide which charge to stop first. Allow about 25 minutes. You need every bank and card statement you hold for the same calendar month.
Pick a recent full month and download every statement that covers it: each savings and current account, each credit card, and any other account that charges fees, such as a multi-currency wallet. Accounts you rarely use belong in the pile too, since fees sit unnoticed where nobody opens the statements. Marcus picked March and ended up with four: his main savings account, his old student account, his main card and his second card.
Go through each statement line by line and list everything that cost money: fees, interest charges, finance charges, foreign transaction fees and annual fees. Use what you learnt in lessons 3.1 to 3.4 to recognise them. For each one, write the account, the date, the description and the amount. Also note anything you expected and didn't get, such as a missing bonus interest line. It isn't a fee, but it costs you just the same.
Note how often each charge happens. Is it monthly, like a fall-below fee? Yearly, like a card's annual fee? Or tied to something you do, like a transfer?
Marcus's March list, with example figures, read like this. His old student account charged a S$7.50 fall-below fee, every month. His main card had three foreign transaction fee lines on overseas subscriptions, S$0.52, S$1.10 and S$2.38, totalling S$4.00. A S$20 overseas transfer fee came from sending money to his brother, which he does about once a quarter. And his second card charged its annual fee of S$196.20, once a year, in March.
For each charge, write whether it was avoidable and, if so, what change would stop it. Be honest about the ones you'd keep, because some fees buy something you want, and paying them is fine as long as you've chosen to.
Marcus marked the fall-below fee avoidable, because the old account served no purpose and he could move the balance and close it. He marked the annual fee avoidable as well, since he barely used the second card and could ask the bank to waive the fee or cancel it. The foreign transaction fees he marked as not easily avoidable for now, since the subscriptions were in US dollars. The transfer fee he marked "check": other ways of sending money abroad exist, but comparing them means looking at the exchange rate as well as the fee, as lesson 3.4 showed, so he'd look into it before deciding.
Now total what you could avoid over a year. This is where people make a mistake. Multiplying the whole month's total by twelve only works for charges that happen every month. A yearly charge like an annual fee happens once, so count it once. A charge tied to an action, like a transfer, depends on how often you do it.
Marcus's avoidable charges were the S$7.50 monthly fall-below fee and the S$196.20 yearly annual fee. Correctly counted, that's S$7.50 times 12, which is S$90, plus S$196.20, so S$286.20 a year. Had he multiplied March's S$203.70 of avoidable charges by twelve, he'd have got S$2,444.40, more than eight times too high, because the annual fee would have been counted twelve times.
The yearly figure is what makes the decision feel real. S$7.50 a month is easy to ignore. Ninety dollars a year for an account he never used was not.
Rank the avoidable charges by yearly cost and make the change behind the largest one during this exercise, rather than adding it to a list, since a call, an app setting or a form usually takes under fifteen minutes.
For Marcus, the largest was the annual fee. He called the bank, asked for a waiver, and decided that if it wasn't granted he'd cancel the card. The old account was next, for the following week.
You finish with one table covering every account for one month: each charge, its frequency, whether it's avoidable, the change that would stop it and its yearly cost. At the bottom is a total of avoidable charges for the year, worked out correctly, and a note of the one change you've already made with the date you made it. Keep the table, because the final project builds on it and next year's version will show whether the changes stuck.
Your own month comes next, and the most useful part is the step people skip: actually making that first change before you close the statements.
Complete the fee audit for one month and make the one change that removes the largest avoidable charge.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).