Thursday Trim the Trash: April 13, 2017
Banks Fees and Emergency Funds
Happy Thursday everyone! Kind of a Friday feel, yay 4 day weeks! Today’s Thursday Trim the Trash post is one that I am very passionate about. Banks are a common victim of my rants, but as they say, if the shoe fits…..Bank fees in my mind are disgusting. The fact that the bank charges you a fee to hold your money is just mind boggling. Bank fees amount to 9 million dollars a day in profits for the 5 major Canadian banks. That is very impressive when you think about it.
What about me? Well, I pay no bank fees. Zero, zilch, nada. As many people know most banks offer no-fee banking if you maintain a minimum balance. For my account at TD, it has to be at $5000 to maintain no fees. That is a lot of money when you think about it. I didn’t get there overnight. It took me about 7 months to save up that amount. It was worth it in my opinion. I had made the decision that I will not pay the bank a cent more than I have to.
The real purpose of the account is two-fold. Yes, I pay no fees. That includes my Aeroplan VISA which normally costs $150 a year, a huge rip off by the way. The no fees are great but the real reason for me maintaining that balance is that it also serves as my emergency fund. I kept going with my savings and built that account up to one-year living expenses. Now there is no chance of me dipping below the 5K minimum. I also feel comfortable in knowing I have a nest egg in case an emergency strikes.
Getting started with an emergency fund can seem daunting, but it can and should be done. Dedicate a little from each pay in your chequing account towards this goal. Set the “no-fee banking minimum” as your goal. Once you achieve that goal keep on going until you have one-year living expenses.
Bank fees are a bitch, plain and simple. Pardon my language. That 9 million a day doesn’t include any money from me. You should make it your goal that it doesn’t include your money either. Thanks for reading my post on bank fees.Have an amazing Easter Weekend!! Happy Saving Friends!
“It is easier to rob by setting up a bank than by holding up a bank clerk.” – Bertolt Brecht
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at www.budgetboss.ca.