Getting charged a fee—especially a massive or unexpected one—can be an emotional experience. So when fees happen to you, it’s important to understand the five stages of fees.
The easiest way to first deal with fees is pretending they don’t exist. Fee? What fee? I don’t know what you’re talking about! Search my person and my vehicle—I think you’ll find that I’m totally fee-less.
After all, a two-dollar ATM fee seems puny at the time — hey, it costs less than a latte does. And a 1.5% expense ratio on a mutual fund is just a weeny little percentage. That is, until you use an out-of-network ATM ten times in a month. Or until you beef up your nest egg only to realize that the 1.5% fee is on your total assets, and compounds just the way your savings do. If you put that kind of realization out of your mind, then it’s almost like fees never existed, right?
Until they do! All of a sudden, that $30 a month in ATM fees can’t be ignored anymore. Or that ridiculous “convenience” fee for buying concert tickets online. Or the AUM fee you pay to your financial advisor, even though they aren’t exactly beating the market for you these days.
Once you fully realize the extent that fees could be eating away at your finances, it’s totally normal to get pissed off. After all, this is your hard-earned money, but it doesn’t even feel like your money anymore.
So—what can you do to get rid of these fees? Can you bring your bank a plate of cookies? Will the fees go away if you act real nice? If you compliment your financial advisor on his tie, will he knock your wrap fee down a couple of percentage points? Is there anything you can do to make sure fees don’t suck your wallet dry?
This is the stage where you think there’s no end—that the future is full of fees, and there’s no getting around it, so why even bother? Now you’re really starting to think of excessive fees as a fact of life, which is…pretty depressing.
But there actually are things you can do about fees. That’s right—you don’t need to hide under your bed and watch as fees leak out of your account in ever-growing amounts.
First thing’s first: vigilance is half the battle. Keep an eye on your bills for unforeseen fees, and see if you can set up an alert that will prevent you from overdrawing your accounts. Negotiation is also useful. Can you make a call to knock your fees down? Plus, there are are plenty of tools online that will help you detect and reduce your fees. Mint.com sends you alerts when you’re charged fees, and Magnify Money shows you checking and savings accounts without annual fees.
And FeeX is a free service that helps you find and reduce the fees in your retirement account. 401(k)s and IRAs can be loaded with excessive and even hidden fees—FeeX has found its users 250 million dollars in potential savings so far. All it takes is signing up for a free account, linking your 401(k), IRA, or other type of retirement account, and letting them do the work of scanning your accounts for fees. If FeeX finds a similar, lower-fee investment, they’ll show it to you—simple as that.
Fees are a part of life, but they don’t have to ruin your life. Next time you find yourself in the middle of the five states of fees, skip straight to action and start reducing them!