4 Hidden Fees that You Should be Aware of

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Friday, April 15, 2011

Dan Forbes, GoLocalProv Financial Expert

One of my favorite things is the discovery and subsequent removal of an unnecessary expense from a client’s life. It’s like getting a raise without the awkward quarterly performance review! Here are four areas where you can trim fees and beef up that summer vacation fund:

Mutual Funds

Calculating what you’re paying in mutual fund fees is about as easy as figuring out why the Kardashians have so many television shows. You may be paying a management fee, a commission, or a “12b-1” fee on a yearly basis. The money you don’t pay in mutual fund expenses is left in your investment account to grow so keep these fees to a minimum.

Water Bill

This one could be a biggie. A few years ago, I realized that my water usage was being “estimated” instead of electronically sent to the water company. I took the step of having them remove the old meter and put in a new one that allowed them to charge me only for the water I was using. When they reviewed the old meter, we discovered I had been overcharged by thousands of dollars over the years, and I received a nice fat refund check. Ka-ching!

Bank Fees

According to the “Truth in Savings Act”, banks are required to disclose all of their fees to the consumer. Check your statements to make sure you’re not paying unnecessary ATM fees. Some banks are moving away from “free checking”, so be sure to stay on top of your bank’s fee schedule. It’s a pain to switch banks, especially if you have automatic deposits or payments coming out, but a decreased fee burden might make it worth it.

401(k) Admininstration

New laws being implemented are going to force 401(k) providers to disclose fees, so let’s hope company owners take an interest. Typically, you’re paying an investment fee, a retirement specialist fee, and a third party administrator fee. Many company owners are paying a lot more than necessary. Take the steps to ask what your fees are and then have an unbiased professional let you know if you’re paying too much.

Dan Forbes is a regular contributor on business financial issues. His office is in Providence, RI. He leads the firm Forbes Financial Planning and can be reached at [email protected]