Who wants to hear about my banking situation?
(No hands raise. One person slowly puts up his hand, but the crowd all look at him disapprovingly. His hand goes back down.)
WELL, TOO BAD SUCKERS.
It’s simple. I do the majority of my spending either using cash or my one credit card. There are a few bills to pay (namely the credit card, but also stuff like power and water, things they won’t automatically take off my credit card), which gets done once a month on this very laptop, usually in between video games and goofy kitty videos. Good thing it doesn’t take very long.
In the meantime, I often won’t check my bank balance for weeks at a time. It stays remarkably stable, since almost no transactions go through it. Some of you balance junkies just fainted, didn’t you?
My bank is one of Alberta’s largest credit unions. To be honest, there’s nothing special about it. I used to think the girls were attractive, but I am forbidden to think that anymore. Besides, it’s the truth. Most have either left or gone to roles where they’re not stuck talking to guys like me on a daily basis. Still, I like the fact that most people there know my name, and I get treated well the 3 times a year I walk into the branch.
My account used to be a straight pay-per-transaction deal, but the bank recently implemented a policy that everyone between 22 and 60 has to pay two bucks a months to keep their account active. I was pissed at the time, but quickly grew apathetic. Two bucks a month is only two bucks a month. It’s not very much money.
Plus, I’m still paying 50 cents per transaction. I average three or four withdrawals a month, so let’s say for easy figuring that I’m spending four bucks a month on bank fees.
Cue the outrage
If I was any other personal finance blogger, this would be the worse than a puppy getting cancer. I’d be practically foaming at the mouth in excitement to fix this hole in my budget, or some other such nonsense.
Next week, I’d probably come up with some post comparing all the chequing accounts out there.
The week after, I’d come out with another post on which free chequing account I chose. Spoiler alert! It was
ING Direct Tangerine.
I understand why the average personal finance blogger (and reader) is so obsessed with their chequing account. It’s the low hanging fruit. Anybody can realize that $4 or $11 or $15 or $x is greater than zero, so that’s what they cut. If you’re at all comfortable with the internet, you’re hardly visiting a branch anyway. There’s no good reason to pay.
These reasons all exist, but that doesn’t mean they matter.
Say you made $3,000 per month, after taxes. If you pay $4 per month in bank fees like me, you’re paying a little more than 0.1% of your budget on bank fees. Even at $10 per month, it’s about 0.35%. As in, it’s basically nothing. Most people could easily cut back a $10 per month bank fee to a $5 per month deal with the same bank, just by getting a different plan, too.
We focus on the tiniest of details while forgetting the big picture all the time.
We tell people to cut back on coffee, when a simple step like moving closer to work can save $500 a month.
We spend more time researching which hotel to stay in during our weekend getaway than searching for potential investment opportunities.
We convince ourselves that doing stuff like buying a MacBook Pro (which costs $500 more than a comparable Windows machine) is really “frugal,” even though all we do it putz around on the internet.
There are a million more examples of this, but you get the picture. Just about everybody reading this has a way to cut hundreds of dollars out of their budget. They don’t, for whatever reason. Maybe moving is a pain in the ass. Maybe earning more is hard. Maybe cutting a vehicle out of the equation might slightly inconvenience everybody. But those are where the big wins come from, not something stupid like bank fees.
And while I’m at it, your investment fees hardly matter either. Do you know how much time I see dedicated to discussing switching out of an iShares ETF for a Vanguard one because the fee is 0.1% less per year? There’s a case to be made if you’ve got six figures invested in such a fund, but if you’re the average 20-something investor with a cool five Gs in the thing? Congratulations, you just saved yourself $5. Don’t spend it all in one place, slugger.
There are certain moves you can make to drastically improve your finances. Worrying about your bank fees isn’t one of them. So just don’t bother.