New York sure is “the city that never sleeps” — thanks to our financial problems.
Whether we’re single or married, a parent or an empty nester, we are all wondering, “Where did my money go?” It doesn’t help that some credit card companies charge “hidden” fees, big-box stores hit us with yearly renewals, and local supermarkets are prone to overcharging us at the register. With all these unwanted (and sometimes unknown) expenses reaching into our pockets, how can we possibly balance our budgets? We can start by paying a little more attention to these budget busters:
Busted by the bank
Since the beginning of the Great Recession in 2008, we’ve learned that banks are not going to handle our money for free. Banks are receiving bad press for increasing service fees, and to counter this, are advertising free checking or free cell phone application to check on accounts — but someone has to pay for the “freebies.”
Bronx resident Juanita needed to use her money market account for an emergency, and her balance dipped under the minimum required to qualify for free services.
Then she moved, and her monthly statements were not forwarded to her new address. Meanwhile, monthly service fees on her otherwise dormant account were racking up — so much so, she owed the bank money! When Juanita went to get money out of her account, she learned that it was overdrawn. She was forced to pay more than $160 in penalties before closing it and, although her account was closed, and the fees were paid off, her credit report shows that the account had gone into collections. This will stay on her credit report for the next seven years. She had no way to prove that she did not get the notices and said it was not worth the time or trouble it was taking her to fight with the bank and the three credit reporting agencies.
Some money market account must maintain a certain balance to qualify for a special interest rate. If the account goes below the minimum balance, the monthly fee could be as much as $40 just to maintain the account. If your accounts are vulnerable to going into overdraft or insufficient funds, it would be wise to find a bank that charges low bounced-check fees. Unfortunately, no bank will advertise that.
We should all keep in mind that the bank is in business to make money — by using our money to turn a profit.
Time is money
Most of us forget our monthly or yearly membership anniversary at gyms, shopping clubs or websites, but the gyms and shopping clubs don’t — and some automatically renew our contracts and charge our credit cards on, at, or near the anniversary.
Whitestone resident Maria noticed a charge of an additional $175 on her credit card for her annual shopping club membership, but didn’t know what it could be for — she had not been shopping at the store recently.
Only after she looked into the charge did she learn that her membership automatically renews and deducts the fee on her membership anniversary.
She wanted to keep the membership but wasn’t ready to make the payment at the time she was charged. She later found out that even if she had the option to delay the renewal, it would cost her the same amount and would extend over the same 12-month period.
“The membership goes from the date you started and runs for 12 months,” a manager told her. “We are only supposed to give you 12 months from your start date when you renew, no matter how much later you renew.”
When she looked into canceling to avoid the renewal fee, she was told she would have had to do it two months in advance.
“I was really frustrated at being forced to pay that amount. But they said it was my own fault because I signed the contract,” she said.
Find out when you have to renew or can cancel any memberships that would cause a financial hardship — especially for health club and gym memberships for which you do not get any of that money back.
“Lost time is lost money,” warned Maria.
Avoid getting sandbagged
Supermarket shopper beware! A year-long city-wide investigation of 1,000 New York supermarkets conducted by the Department of Consumer Affairs indicated that one out of every two had violations.
In low-income communities, 64 percent of the stores failed the city’s inspections. The top violations were improper prices on items, improper taxes on non-taxable items, inaccurate checkout scanners, unavailability of scales for customers, improperly weighed food, and leaving off the last date of sale.
The best thing to do now is to check out the prices in circular and what is on your receipt when you checkout. Check food items for freshness and weigh food items that are priced per pound. Otherwise, you could be getting sandbagged without knowing it.
Updates and upgrades
Just as fashions come and go, so does technology. The newest iPod, cellphone, video camera and computer are even designed to become obsolete after a certain amount of years. Or, they require periodic upgrades to continue functioning. Remember just last year when analogue TV became obsolete? Your old TV became useless and you had to buy an adapter or a brand new TV.
“Companies don’t make money by making good products,” says Ben, a computer specialist from Flushing. “They make money when you have to get an upgrade. They make a profit if you have to replace or fix it.” The last time I had to have my computer fixed I, thankfully, had gotten an extended warranty on it.
Keep in mind that a manufacturer’s warranty is limited, but extended warranties are available for an extra price. Depending on the terms of the warranty, the service call may be free, but any necessary replacement parts could bear an additional cost.
To get the most out of your stuff and your money, check your warranties for the expiration date and find out whether any of the warranties can be extended on the stuff you like and want to keep.
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These hidden fees and surprise charges are disappointing, but with an awareness of what could happen, we can proactively stay on top of situations as needed. Be aware of what is going on in your budget, but take care of yourself — after all, it’s a balancing act.
Candi Sparks is the author of the “Can I Have Some Money?” book series. You can follow her on Twitter and Facebook as Candi Sparks (writer).
