Earlier this month, I described a reader’s situation. She discovered she had been paying a fee for a credit life insurance product offered by her bank. The policy was no longer active, but that didn’t stop the bank from taking her money. I took the opportunity to dissect the product itself to discover whether it ever makes sense to buy this type of insurance policy, mentioning I’d come back to the premise of her article.
Thankfully, she was able to work with the bank to get refunds for the fees she should not have paid since the expiration of her policy. Nobody — not a bank or any other company you deal with — has any obligation to offer you what is best for you. Even financial planners who have a fiduciary duty to their clients are focused on the bottom line of their businesses over and above the concerns of their customers. It just so happens, in some cases, businesses consider customer satisfaction as the key to continued business. But nobody can expect a bank to tell a customer to stop providing it with money.
It’s the consumer’s responsibility to ensure there are no money leaks, like these unnecessary monthly fees. Whether rich or poor, there’s an excuse to ignoring bills. Without much money, coming to terms with your expenses could be psychologically harmful in the short term, increasing the desire for avoidance. When in a financial situation where your income far exceeds your normal expenses, some of the details can be lost. When not under financial threat, you have more wiggle room with finances, and what doesn’t cause a problem today can be left alone. Neither of these are good excuses, however.
If you’ve been tracking your income and expenses, you may already know where these leaks are. I knew some of mine. One was obvious, because it was a monthly recurring fee, the only charge on a credit card I otherwise stopped using several years ago. I was paying for a membership in a public radio station. Without a commute, I listen to the radio less frequently, so this was a charge I could easily remove. It also frees up money I consider in my charity budget for other opportunities.
For me, this was a service I stopped using personally, so I canceled my membership. That is not how I deal with most of my charitable contributions, however. I often donate to organizations in which I’m not directly involved, and with those I am not looking for some kind of service for the price I pay.
In September, I saw the same lack of benefit received after paying my monthly membership fee to the local gym. Rather than canceling my membership there, I rededicated myself to making the most out of that monthly fee. If I had decided that I wasn’t interested in going back to the gym, I would have canceled the membership.
Reviewing my monthly expenses, I see I do have quite a few services I pay for that I use. Even without looking at my statements, I know I pay for cell phone and mobile data service. I pay for cable television, high-speed internet access at home, and streaming video service from Netflix. I use all but Netflix frequently, and my impression is that I use Netflix just enough to barely justify the cost.
What services do you pay for that you might not use frequently enough to justify the cost? Would you consider canceling the services?
Published or updated November 19, 2012.