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If you're in your 20's or even early 30's, chances are, you may be leaking out cash from your bank account and you don't even know it! In this article, I'm going to discuss 3 things to be aware of in your finances, so that your money isn't just slowly fading away without you knowing it.
1. Bank Fees
I bet that the majority of you reading this didn't know that your bank actually charges you around $10-12 per month for a maintenance fee 😥. Why does this happen? Chances are, you don't have a daily minimum balance or have a certain amount of money deposited directly into your account each month. Some banks will require you to have a minimum of $1,500 in your account at all times. Other banks may require you to have a consistent direct deposit of $500 per month into your account. Break these rules and you'll see "-$10" in your bank statement each month. I know, it sucks.
What can you do to prevent maintenance fees?
Simple. Go to your bank's website right now or call a bank representative to find out what fees there are. One simple 5-minute check on a website can literally save you more than $120 each year! Can you imagine all the things you can do with $120?
Now there may also be another fee that you might not be aware of, which is called an overdraft fee. Simply put, if your withdrawals and transactions total more than the balance in your checking account, you get charged an overdraft fee that can range anywhere from $20-35! Yikes!
How do you prevent overdraft fees?
You can set alerts in your bank to notify you that you spent or withdrew more than you have. Or if you want to go cold turkey, why not just opt out of automatic overdrafts altogether and not let the bank cover you if your transactions go over what you actually have?
Look, I know it's hard to swallow this tip, but don't spend more than you have. Period.
If you really are tight on money and you can't help getting charged left and right from maintenance and overdraft fees, why not consider a new way to bank with Wealthfront? When you open up a Wealthfront cash account, you'll never be charged any maintenance, overdraft, or sneaky hidden fees, ever! The best part is, if you put your money in there, they actually pay you money with high-interest checking! What a nice way to passively make money, instead of lose money, huh?
Upgrade your banking today through Wealthfront. The Wealthfront Cash Account earns 0.35% APY, over 8x the national average per FDIC.gov. With the Cash Account, you can add checking features to direct deposit your paycheck, pay bills and friends, deposit checks easily with our mobile app, and access your money quickly with a debit card.
2. Sneaky Subscription Services
With our world going digital with the majority of our products and the way we pay for things, it's good to be aware of all the subscriptions you're paying for. Spend 10 minutes today and take a look at all the transactions you've had in just this month. I know it's going to sting a little bit, but it's better to do it sooner, rather than later. Do you really need a Hulu, Netflix, HBO Max, and Disney+ subscription 📺? Do you really shop that much on Amazon to need that annual Prime Membership? How about your gym membership? Do you really need to keep paying for the gym each month right now with people learning how to work out at home instead?
Not only do the majority of Americans forget about all of the subscriptions they pay for each month, these services often increase their prices each year!
For me, I don't ever think I'm going to let go of my Netflix subscription. But if you're itching in curiosity to know the price increases over the last couple of years, let me tell you what they are. When Netflix just started, they were only charging $8 a month. In 2014, their premium plan jumped up to $12 a month. In 2017, that price jumped to $14 a month. In 2019, it increased to $16 a month. And what is it now? It's $18 a month! Now if you think they're going to stop here, think again. The company is most likely going to increase their price again within the next 1-2 years. Let's be real here. The company has to make money somehow.
So what can you do right now?
Easy. Go through the list of services you're subscribed to and cut out the ones you don't need. Trust me, there's a very good chance that you don't need 5 streaming services and 4 news publication subscriptions. You can also consider getting a plan to share with your family and split the cost with them. Or if you're a student, there are often times where there are student discounts.
3. Inflation
I know. You've heard of this word before in your high school economics class, but what is it and how does it affect you? As the government continues to print money to have it circulate into the economy, the value of the money you have right now actually decreases! Inflation is around 2-3% each year, meaning in around 23 years, the $10,000 you have in your bank account might only be worth around $5,000🤯!
This is the main reason why you shouldn't just leave all your money in the bank since it's just shrinking in value each year.
So what can you do to prevent inflation from eating away your money?
No, it's not to hide your money under your mattress since the value of your money still goes down the drain over time. If you've been following me and my team for a while, you know that investing is the number one way to beat inflation. For me, I love investing in the stock market and one of the most passive ways that I've found to grow your wealth is to simply open up a brokerage account, like a Roth IRA, and to invest in an ETF that tracks the S&P500, like SPY, VTI, or VOO. By investing in fundamentally sound ETFs like these, not only will you be able to fight inflation, you'll also be able to grow and compound your wealth over time!
So to sum everything up in a little nice package for you, so you aren't wasting and losing money every month, (1) make sure you're aware of your bank fees, (2) cut out unnecessary subscription services, and (3) invest your money to combat against inflation.
By the way, we're planning to release our Level 2 series on LEAPs this Friday 12/18/20! To celebrate, we're gonna give you all an early bird special discount! We're going to reward current standard members by grandfathering them into level 2 up until the release of level 2 so if you haven't already subscribed to our standard membership where you'll learn about selling covered calls and cash-secured puts to create an additional income stream on companies like Nike, make sure you sign up! What we'll teach in level 2 is very complementary to level 1 so you're going to want to tune in!
Stay safe and healthy,
-Steve
Disclosure: While Wealthfront Brokerage LLC (“Wealthfront”) did not sponsor this content Wealthfront did provide certain feedback regarding its Cash Account in Section 1. Call to Leap and Wealthfront do have an agreement in place to promote Wealthfront products on certain social media platforms. Banking services for the Wealthfront Cash Account are subject to identity verification by Green Dot Bank, member FDIC. Cash Account is offered by Wealthfront, a member of FINRA/SIPC. Wealthfront is not a bank. Wealthfront conveys funds to partner banks who accept and maintain deposits, provide the interest rate, and provide FDIC insurance.