Is Your House Leaking Money?

Something I learned a long time ago is to keep an eye on all those little charges that creep into our financial lives every month. We don't watch or peruse our monthly bills as much as we should to avoid money slowly leaking from our accounts. Incremental charges like;

• mortgage insurance 
• credit card fees 
• municipal taxes 
• digital banking fees 
• extra phone fees
• cell phone  
• cable charges 
• cable rental equipment
• e-transfer fees

Check and go over line by line your monthly bill statements. If you've gone paperless as we are now programmed to do for the sake of saving trees, you may never notice some of these debits because you don't have the time and patience to go on-line and check. Meanwhile on your account you might have over draft fees, cheque fees and cheque ordering fees to name a few. Know what you're being charged for. The savings can be huge leaving you with more investible funds at the end of the month. Maybe!

How annoying is it to be charged for having a bill sent to your home? For the privilege most companies charge you $2. Some of us like getting a hard copy of what we owe so as not to miss a bill payment, but why the charge? Just for being a customer? The government is soon putting a stop to this leaky charge. We'll see. To save a little scratch every month it forces us to do everything on-line and go paperless. Nothing wrong with that, just completely unnecessary to charge us for the privilege. Never mind all the job losses in banking. Tellers will soon be obsolete.

How much in insurance costs are you paying every month? Car, fire, mortgage, contents, life, critical illness etc. etc. We can become insurance poor if we don't keep an eye on all these leaks that can turn into a flood and severely crimp our monthly cash flow. 

Check all your policies to determine if you have too much insurance for what you and your family needs. For example why have mortgage insurance if you have life insurance? You can realize a huge savings by not carrying insurance on your mortgage in case of death. That's what life insurance is for. 

On our last mortgage the charge for this was $220 per month on top of everything else. This is a huge moneymaker for banks not you. No thanks!

It pays to visit your bank and talk to them about fees. Of course if you bank in a grocery store then you won't need to do that but chances are you won't get to talk to anyone anyway. Some services are worth paying for. I have a no-fee chequing account for day-to-day expenses and a low-fee account at a big bank for all my borrowing, investing and trading needs. Sometimes I just like to sit and talk to all those nice people at my bank. After all it's where I get my money, so best to develop a relationship with them.

Municipal Taxes

Do you pay your own municipal taxes or do you blend your payments into your mortgage and have the bank pay them? If you do, do you think the bank offers that service for free? Well, they don't. You are paying them and most never see or notice the charge because it is so cleverly disguised. Usually in the form of an overdraft account you don't know exists. 

Make an appointment with your lender and have it explained to you. We pay our taxes directly to our municipality. It consists of ten monthly payments every year. No deductions in November and December so you have a little more money in your account to meet your Christmas shopping needs. Your bank does nothing for free, nothing! They actually charge you an overdraft fee because they pay your taxes in one-lump sum at the beginning of the year. 

You don't have the money in your tax account so they loan it to you and you unsuspectingly pay it back monthly. They just blend it into your mortgage payment and you're done. So account opened, taxes paid, oops you're overdrawn, no problem, here's a tax loan expense added in, overdraft charge added and we're done. That was easy! Another leak in your account worth fixing. Oh those nice sneaky people at your bank.

After we paid our house off I asked the bank for our deed. They said “sure we can get that for you, it's $250.” What $250 really?”. I called the land registry office and they politely said we could come in and do a search on location for $50. Quite the savings for doing it yourself.

Yearly credit card fees are another leaky charge you never really see once you go paperless unless you are so diligent perusing these statements. Who has the time these days? The fact is there are so many free credit cards out there, that there's just no need to pay someone to use and obtain their credit card. Some like Amex charge $140 a year. You don't need it. Go through all your cards and determine if any charges you're paying are necessary.

Check all your utility bills every month and question immediately any charges you don't understand. Do you pay monthly rent on your hot water heater? How much is it? When does it end? Can I pay it off and will it be cheaper? Do I need a direct heat and air conditioning service plan if something goes wrong at the wrong time? 

Well, there's never really a good time to lose heat or cooling services when you need it. You might not need a furnace plan, just get the furnace serviced and or cleaned every year. It might be cheaper just to pay as you go if there's a problem. Do the math, people on these plans are paying exhorbitant fees and never tapping into the service.

When we bought our current house the gas company kept charging us fees on a plan that belonged to the previous homeowner. Yes, they just carried the charges over without question, even though there was now a different name on the account. Taking advantage? You betcha. 

You have to be a hawk on these bills, they also raise the price and you won't notice the leak right away, because you signed up for their automatic payment plan with paperless billing, as we were shamed into doing. 

It's great to be on a budget and write down where the money goes but you also need to question the fees and deductions that come with all the expenses. 

Can I get it cheaper somewhere else? Why are we paying this? Make the call right away. I call my phone, cell phone and cable providers pretty much every month just to let them know I'm watching and also to ask for discounts. The yearly savings again are huge. 

Are you paying extra money per month for a digital service fee? Or for an extra box in the upstairs bedroom you forgot about? All these fees and charges should be questioned. Watch out for leaks, in some cases they can turn into a flood and then you'll need to be bailed out.

Once you go through this exercise you'll have more money to invest for the long-term or to reward yourself for savings realized. 

What leaks are in your house? Can you fix them?

Related Post: Never Invest With Your Bank

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