If I told you that I had a way to get up to a guaranteed 25% loss on your money what would you do? If you didn’t punch me in the face your next reaction would probably be laughter. Why in the world would anyone willingly take a 25% loss on their money? Well, most people wouldn’t, but that doesn’t mean it isn’t happening to smart folks like you and me every single day.

In fact, I’m even ashamed to admit that I’ve done it plenty of times without even really thinking about it. It can happen to the best of us and when we are in a hurry or don’t plan ahead you may also be carelessly throwing money out the window without even thinking twice about it. So, how are so many people throwing their hard-earned money away?

ATM Fees

Call it a Convenience Fee

As you probably know, not all ATM transactions carry a fee. If you use your own bank’s ATMs, or stay within a particular network, or use a credit union, you may be able to avoid fees completely. But what happens when you aren’t near one of your bank’s ATMs, no credit unions nearby, and you need cash right now? Chances are you’re going to just hit up the nearest ATM. Hey, that’s why ATMs are so great. They are convenient. But this convenience comes at a cost.

Typically, you’ll be assessed a fee by the bank that owns the ATM. It’s not uncommon to see these fees run in the $2-$3 range. In addition, there’s a good chance your own bank is going to charge you a fee for using another bank’s ATM. Again, it could be between $2-$3. But surely, that’s not a big deal, right? Wrong. What if you just stop to grab $20 and you’re charged $2.50 by the ATM and $2.50 by your bank — that’s $5 in fees just to get $20 of your own money. That’s 25% of your transaction!

Ok, so maybe you withdraw $40. That’s still a 12.5% fee. $50 withdrawal? 10% fee. Even at $100 it will cost you 5%. Now, let me ask you this. If you were guaranteed to lose 25, 10, or even 5 percent in any other investment, be it in the stock market or otherwise, there’s no way you’d even consider putting your money there. But an ATM fee? Suddenly people couldn’t care less. It’s amazing what people will do for convenience.

Stop Throwing Your Money Away

Instead of paying a fee just to access your own money you should take some steps to eliminate this behavior at all costs. Here are a few things you can do to help minimize ATM fees in the future.

Consider a credit union. If you’re a member of a credit union and part of the co-op network you have over 28,000 in-network ATMs at your disposal. With such a large number of qualifying ATMs to choose from you have a better chance in finding an ATM near you that won’t cost you a thing. The only drawback is that you still need to have a selection of credit union ATMs around you. In most cities this isn’t a problem, but around here the nearest co-op ATM is over 10 miles away.

Always carry some cash on you. I know a lot of people these days operate virtually cashless, but this is exactly what can lead you to paying unecessary fees in a pinch. Sure, most places will take debit or credit cards, or possibly even checks, but what happens when you’re in an unexpected situation where cash is the only option? No time to run to the bank or maybe the banks are closed, so you hit the ATM. There goes your money. So, make it a habit to keep some cash on you at all times. It doesn’t have to be a lot, but if it’s there in a time of need and keeps you from having to go to the ATM you’ll be thankful you had it.

Plan your cash needs in advance. If you can, try to plan out in advance what your cash needs are for the week and make one large withdrawal at the bank or your bank’s ATM. If you think you’re going to need $100 over the course of the week don’t take out $40 on Monday and assume you’ll just get the rest later when you need it. You’ll probably end up being pressed for time and have no other choice than to get hit with an unnecessary fee.

Use debit card purchases to get cash back. Probably one of the easiest tricks is to get cash back when you make a debit card purchase. You don’t have to be at a bank or even use an ATM for this to work. Simply make a purchase with your debit card and ask for cash back. It doesn’t cost you a thing. The only drawback is that most places will have a limit on how much cash you can get back per transaction. So, don’t go in and buy a candy bar and ask for $200 cash back. It probably won’t work.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Would You Willingly Lose 25% of Your Money? Chances Are You Already Do

Create an Emergency Fund With Baby Steps

It probably doesn’t come as much of a surprise that not having enough money saved up can pose a financial problem. We all know that saving money is important, but when times are tough and money is tight it feels like an impossible task. But the risk of not having any savings, or very little savings outweighs any potential cash flow problems you’re facing.

Unexpected things happen all the time and it is part of life. Whether it is a loss of income, a natural disaster, accident, unexpected sickness or even an unexpected child there are many events out there that could impact you with little or no warning. We hear stories in the media all the time about people suffering from one thing or another and it is easy to conclude that it won’t happen to you, but this is a big mistake.

Clearly, having absolutely no savings at all can pose a problem in a financial emergency.  But what if you currently do have some savings, is it enough? There are many different rules of thumb on this. Some say you need at least three months of expenses saved up, others say six, while even others recommend a full year. There isn’t a right or wrong answer and it ultimately depends on your personal situation. Obviously, the more savings you have the better, but this is not an easy thing to achieve and generally doesn’t happen overnight.

Getting Started

Perhaps the most difficult aspect of saving money is actually taking that first step. If you don’t have much saved it’s probably because money is tight, so the thought of putting money aside when there are other bills to pay may be quite stressful. If you don’t have one already, you first need to open a savings account. This could be through your local bank or credit union or through one of the online savings options such as FNBO Direct. The great thing about online savings accounts is that you typically get better interest rates than what your local bank is offering. If you’re going to save money, you might as well put your money to work for you!

Next, you need to determine the frequency and amount of money to save. If saving isn’t an automatic process you will probably end up unable to keep your commitment to save. For starters, you should determine how frequently you want money to be deposited into your savings account. The more frequent the deposit, the less you will feel it since you will be depositing smaller amounts are regular intervals. If you are paid weekly, great. Set your direct deposit with your employer to deposit part of your paycheck into the savings each week. If you don’t have direct deposit or don’t want to fuss with changing it you can do the same thing with automatic transfers from your checking account. Each payday simply schedule an automatic transfer into your savings. If you are paid bi-weekly you can follow the same steps. Coordinating deposits with pay will lessen the impact of that money leaving your account.

One of the difficult things to consider when establishing a savings plan is determining how much to save. When you look at the dollar amount required to cover a few months worth of expenses it can be very discouraging. The key is to not to look at the ultimate dollar amount and instead look at it on a monthly basis. Generating savings will take time, so if you can look at it on shorter terms it will seem like an obtainable goal.

Start Small

When money is tight it’s hard to divert even a few dollars away from other items in your budget. If this is the case you just need to start small. In an example, let’s say you are paid bi-weekly. Would $10 coming out of your paycheck really be noticed? Probably not. This comes to only $20 per month, which you are probably thinking is almost nothing. That is true, it isn’t much money and at that rate it would take years to save up enough money to fund your savings. That isn’t the point. The point here is to establish something, even if it’s a small amount. This establishes a good habit which is what you need in order to be successful in creating savings.

Once you have established a regular and automatic deposit into your savings you will generally not even notice that money coming out after a few deposits. You begin to forget and naturally adjust your spending habits to make up for the fewer dollars. This is the point in which you need to make changes. If you get used to $10 or $20 coming out per paycheck, bump it up after a month or two by another $10 or $20. Let that new amount come out for a few paychecks or months and then add a few more dollars to this amount. This gradual process will reduce the shock and allow you to slowly build up your savings.

Remember, this doesn’t happen overnight and don’t expect it to. Most people get discouraged simply because it seems impossible to save a sizable amount of money in a short amount of time. So start slowly and with modest amounts, then adjust those amounts in small increments over time. Before you know it you will be saving enough money to adaquately build your savings in a reasonable amount of time. The real key is to get into the habit of saving money regularly. Time will take care of the rest.

Start saving today with no minimum balance at FNBO Direct.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Don’t Have Any Money Saved Up? Start Small and Make Saving Automatic

It may not come as a surprise that banks thrive off of fees, but I saw something interesting last week while logging into my Chase account. They had a little animated window pop up with 5 tips to help you avoid checking account fees. Hey, how nice of them. They are looking out for me and making sure I don’t pay any unnecessary fees.

Well, let’s not get ahead of ourselves. The suggestions they offer are pretty much common sense as you’ll see below. While it’s still a good idea to reinforce the basics, they should have gone a little bit further in explaining what triggers fees and how customers can avoid them. Heck, I figured this would be a perfect marketing opportunity for Chase where they could talk about different account types, adding a savings account to a checking, or a number of other things that can be used to not only eliminate fees for the customer, but also attract more business and bring in assets. Instead, they left it with just these five simple tips.

1. Make Sure the Money’s There

No, really? I guess some people could use the reminder to only spend money that you have in your account, but this is a no-brainer. Make sure there’s enough money in your account to cover any purchase you’re looking to make. Overdraft fees can be expensive and it’s a real pain if you’re only overdrawn by a dollar and get stuck with a $50 overdraft fee. So, be smart and make sure you know how much money you have before spending it.

2. Record All Transactions

This probably goes without saying as well, but you really need to keep track of your transactions. If you do, you’ll also always know how much money you have in your account so that you can avoid making the mistake of point number 1. This is really important if you have a joint account with someone. You may have had a situation like this before where your spouse or partner withdrew some money from the ATM or wrote a check for something and didn’t let you know or record the transaction. So as far as you know the money is there, but then once that check clears or the purchase is made you find your account overdrawn. Make sure you’re both on the same page and recording transactions. Not only does this help keep you from making mistakes with the account, but recording your transactions will help you track spending and maintain your budget. When you see where all of the money is going you can better understand your own spending habits so you can make better financial decisions.

3. Check Your Balance

I’m not sure why this wasn’t part of point number 1 since it’s ultimately the same thing. If you check your balance, you know how much money you have to spend, and should be able to avoid going over the limit. Checking your balance is so easy these days. With online banking, telephone banking, and even mobile banking, your balance is at your fingertips 24 hours a day.

4. Leave Room for Mistakes

This one might not be as obvious, but it’s a good point. You should always leave a little cushion in your checking account. If you regularly check your balance and record all of your transactions, you should be fine. But mistakes do happen. If you use a debit card the merchant might charge you twice, or there could be a delay before the transaction goes through, or it could even be as simple as a bank computer error. While these aren’t all that common and might not even be your fault, save yourself the trouble and make sure you have a cushion. If you’re running your checking account down to the last penny each week until payday you’re running the risk of a simple mistake proving costly.

5. Don’t Stay Overdrawn

Again, really? Overdrawing your account is bad enough, but if you leave the account overdrawn you have to realize that can’t be a good thing. I don’t know what else to say about this one, but if you do become overdrawn, just make sure you do whatever you can to rectify it as soon as possible because the fees for this activity can be devastating. Also, if this occurs and it’s a freak accident for you and you’ve otherwise kept perfectly clean accounts, be sure to go talk to your banker or branch manager. If you have a good account history with them you can usually negotiate all or most of the fees away. But the bottom line is that you really shouldn’t leave your account overdrawn, it’s as simple as that.

Some Real Tips to Help You Avoid Bank Fees

Ok, so those 5 tips from Chase are pretty basic and most people will already be doing these things, so how else can you save money on banking fees? First, make sure you’re on top of the latest account features and promotions that your bank offers. Most banks will have a basic free checking option, but there are also ways you can waive checking account fees by maintaining a certain balance in the account, by opening and linking a savings account, or even just setting up direct deposit. Banks are always changing their accounts and fee thresholds so if it’s been a while since you’ve looked at your account it’s time to stop into your local branch and see what they can do for you. Remember, you are their customer and they want your business, so a good bank will do what they can to keep your account.

If there is nothing they can do for you or no way to eliminate the fees without adding on unnecessary services, then you might consider a credit union. These local institutions are non-profit and typically carry far fewer fees and restrictions on their accounts. While you still probably won’t be able to become overdrawn or stay overdrawn on your account and not incur any fees, you should be able to find a checking/savings solution that meets your needs without as many fees.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Chase Bank is Helping You Avoid Fees by Stating the Obvious

Discover Prepaid Debit Card Gives Parents More Control

Are you a parent looking to give your teen access to money while still maintaining spending limits and control? Do you want a card that can help your teen learn how to be responsible with money? There’s a new debit card by Discover that can help with just that — The Discover Current Debit Card.

These types of teen cards are becoming more popular as it is becoming apparent how important it is to help get a young person off on the right foot when learning about money. We all want our children to avoid bad spending habits, rack up debt, and learn how to manage money properly, but it can be tough for parents to keep up with everything.

That’s where these teen-based cards can really help make it easier on parents. Cards like the Discover Current card come with a lot of features that give parents the control they need while still allowing teens to access money as they would if it was their own account.

The Discover Current Debit Card

Introducing the Current card by Discover, a new kind of debit card for teens with built-in parental controls. With Current Card, parents can add money easily to a card for their teens, set spending limits and e-mail or text message activity alerts, track purchases and access exclusive discounts online. Teens can choose from one of seven unique teen card designs and have access to the following features and benefits:

• Debit Card for Teens with built-in parental controls
• Set daily, weekly, and monthly spending limits
• Restrict teen card use in unwanted shopping categories (e.g. liquor stores, tobacco stores, hotels, etc.)
• Free Direct Deposit for parents & teens
• Free deposits from any credit card or bank account
• $0 fraud liability guarantee
• Withdraw cash at ATMs
• Get exclusive discounts at teen’s favorite merchants
• Free e-mail and text message activity alerts
• No minimum balances, loading fees, or credit check

Since this is a debit card and not a credit card, there’s no credit check and all you need is a bank account to fund the card. If you’re looking to establish a credit history for your teen, then it’s important to note that this won’t accomplish that. At the same time, this also means your teen is guaranteed to get a card even if they don’t have a credit history or you don’t want to co-sign a credit card for them.

How Much Does it Cost?

When you open your teen card account you will deposit an initial amount of at least $20 to each card. You also choose a plan for each card and pay the first month’s membership fee of $5-or choose a $50 annual membership (at a savings of $10). Once you choose the plan, the fee will be assessed for each card at account opening. Other card fees are listed below:

• Add money to the card – FREE
• Four free ATM transactions per month per card (each additional ATM usage is 50 cents)
• $3 for a new card design or replacement lost/stolen card
• Online print-ready statements – FREE
• Copies of statements by mail $5
• $0 inactivity or “dormancy” fee

Do It Yourself and Other Options

For the do-it-yourself parents, you can probably find a way to structure some accounts for your teen that accomplishes many of the same tasks for less. Unfortunately, that also means you probably have to set up an account at the bank for your teen, may not have the ability to set automated spending limits, etc. So if you’re looking for simplicity, easy online control and reports, and the other unique features, a few bucks a month is probably not a big deal and makes the Discover Current Debit Card a good deal.

There may be some concern regarding the fact that it’s a Discover card and it isn’t as widely accepted as say Visa or Mastercard. It is worth checking to ensure that the card is accepted where your teen might use it, but in most cases there shouldn’t be a problem. There’s also another teen card out there by Visa called the Visa Buxx. Unfortunately, this card has more restrictions and fees for many users. For this card you have to sign up through a select group of banks, and if you don’t have an account with the bank, you are typically faced with a fee each time you deposit money on the prepaid card.

So, if you’re looking for a simple way to give your teen access to money using a card while still maintaining total control, I think this card is one of the best options available yet.

Apply for the Discover Current Debit Card today!

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

New Debit Card for Teens and Parents – The Discover Current Card

FNBO Direct Provides Great Rates and Great Service

With interest rates continuing to be slashed across the board, finding attractive yields on savings accounts is becoming even more difficult. At the very least, you’d like to have your savings try to keep up with inflation, but even that can be a tall order these days. Of course, interest rates aren’t everything, and you also want a bank that is secure, provides great service, and has a useful online interface. Luckily, FNBO Direct is a great opportunity to receive a competitive interest rate, remain FDIC insured, and have access to a pretty nice online interface.

FNBO Account Features

• No account minimum
• 2.80% APY as of this writing
• FDIC insured

Just like opening an account with most online, or even traditional banks, you will need to provide some information in order to sign up, verify your identity, and link to other existing accounts. To open an account with FNBO Direct, you’ll need:

• Your Social Security or Tax ID Number.
• Your Driver’s License or ID card issued by a state DMV.
• Employer information.
• Information about any loans or mortgages that you may have to help us confirm your identity.
• For instant funding, you will need your current bank account and routing numbers.
• If a joint account, the other applicant’s information.

Sign Up Today

There are obviously a lot of choices when it comes to savings accounts, but with rates continuing to decline, making sure your money is working its hardest is increasingly important. While I’m not a big fan of rate chasing, I think FNBO Direct is a good place to stick it out. In the past, they have been one of the last banks to drop rates when it was time for a rate cut, and the rates are consistently at the higher end of the spectrum. So, sign up today for your own FNBO Direct account.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

FNBO Direct Savings Account Review – High-Yield Savings at 2.80%