Three Places to Reduce Unnecessary Fees

Small fees and expenses may seem fairly harmless at the time, but please understand that over time these small fees add up and put a big dent into your personal finances. Understanding how to be successful financially isn't something that comes easily, but reducing all unnecessary fees and expenses is one of the most basic lessons that anyone should learn quickly. Let's take a closer look at three areas where you might be able to cut out pesky fees that are eating away at your income.

Investment Accounts

If you are new at all to investing, you may think that this is an area you can steer clear of fees quite easily. You couldn't be more wrong. Fees for everything under the sun run rampant in places like basic stock portfolio accounts, mutual funds, and many other types of investment accounts. The number one fee to avoid inside an investment account is any kind of annual fee. Some brokers charge $100 per year just to "oversee" your account. You don't need that, since you are already paying them enough for transactions. Another spot to watch is mutual funds with loads. Loaded mutual funds can take out up to 6% of your money either at the beginning or the end of your holding period. Why pay such ridiculous fees when there are so many great no load mutual funds out there?

Credit Card Fees

Credit cards are a touchy area in personal finance, since some think you shouldn't even use them at all. I'm not a big credit card person, but if you are able to use them wisely, I think a limited number of cards can be alright. Here is the caveat: if you have a credit card you should always be able to pay off the full amount owed on each billing cycle. The credit card companies obviously aren't a big fan of those who never have to pay interest, but that is the way to keep more money in your wallet. In addition to these fees, many credit cards charge an annual fee. Find a credit card without an annual fee or it won't be worth your money anyways.

Personal Bank Accounts

The single biggest fee that should always be avoided is the overdraft fee. Make it a top priority to keep a close eye on where your account sits at all times. Being proactive with your money is a key to avoiding this kind of a fee. Additionally, ATM Debit card fees must be avoided. Getting that money out of an ATM that charges a fee is an expensive habit. While the typical fee of $3 or $4 isn't going to make you go bankrupt quickly, it fits nicely into the category of unnecessary fees!