What's Eating Away Your Money?

Recessionary times create cautious consumers. According to the credit reporting agency TransUnion, more of us are doing a better job at managing our credit these days, but how are you doing at counting pennies - not just paying off your credit cards? These money-eaters may be slowly picking away at your bank accounts without you even noticing.

Do you know how much money it costs you to invest your money each year? While investing in the markets is a critical step toward building a more secure financial future, it's also important to be aware of – and try to lower - all those fees associated with your accounts. Take a look at your most recent bank account and investment account statements to see what you're paying in account maintenance fees, investment advisory fees, sales charges, in-service transfer fees, performance fees, 12b-1 fees (with mutual funds), withdrawal/surrender fees (with a variable annuity) etc. Talk with your investment adviser or broker about lowering those fees, and reinvest the money you're wasting instead.

In our digital age, signing contracts has never been easier. Unfortunately it's also become much easier to forget the terms of those contracts. You may not realize that the default setting for that movie home delivery service or online greeting card site automatically renews at the end of each year. If you're not checking your credit card statements closely, you could easily continue paying for services of which you never take advantage.

With Congress clamping down on credit card issuers, the industry is getting creative when it comes to finding new ways to generate revenue. Even if you already have a card, check the terms and conditions, because an increasing number of companies are charging existing cardholders new fees, including annual fees, account inactivity fees (if you fail to regularly use the card) and heftier late payment fees. If you're paying an annual fee, consider switching to a card that doesn't charge you for the privilege of charging or, if you have a long history with the card company, ask for the fee to be reduced or waived.

Many companies and services offer incredible signing bonuses - like "free" movie channels offered with a cable company or "free" services added on when installing a new phone line - for a limited time. But even if you discontinue those perks before the promotional period is up, cancellation may come at a cost. Check the terms of every promotional offer as carefully as you would if you were signing up for a paid service - or you will end up paying for it in the end.

Who pays for checking anymore? If you are, your bank should send you a thank you for the free money you're simply giving them. Banks and credit unions nationwide are offering just about everything free to checking account customers, including free access to ATMs or debit cards, free online banking services, free direct deposit transactions and unlimited check writing. If you're paying for checking account privileges either ask your bank to switch you to a free service or take your business elsewhere.

When the mid-afternoon munchies hit, you're more focused on crunchy chips than crunching numbers. But if you were to add up the money you spend on prepackaged snacks (candy bars, protein bars, ice cream novelties etc.) you'd realize you could easily spend $25-$50 or more a month. Buy larger sizes and create smaller packages to bring to school or work, and pocket the difference.

For many purchases, generic or store brand items provide the same quality at a much lower price. For example, generic drugs, which have the same active ingredients as their brand-name counterparts, regularly cost two-thirds less. In fact, store brands tied or beat out brand names 23 out of 29 times in a Consumer Reports test. Consider what you're really getting compared to the price for that big brand name, opt for generic and keep those dollars in your own pocket instead.

You think, "well it's just $2.95 for that iPhone app, only $2 to download a song to your iPod and throw in a few ringtones for $5." None of it sounds like a lot, but it adds up quickly. Make a budget for your digital shopping before you start wildly downloading.

Become a more discerning shopper, demand more for your business and read those statements carefully. As Benjamin Franklin said “watch the pennies and the dollars take care of themselves."