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The Devourer Challenge

The Challenge: Non-Sufficient Funds (NSF's) vs Sufficient Wealth Funds (SWF's).

Are you losing your wealth to bank fees? According to CNN Money, three of the big banks: JP Morgan Chase, Wells Fargo and Bank of America made $1.1 billion in ATM fees, 2.3 billion in maintenance fees and 5.4 billion in overdraft fees in 2016. These are alarming numbers. Are you giving up your wealth to bank fees? If you are, your challenge is to STOP THE DEVOURER.

There was a time when banks paid us to keep our money, now we pay them. Banks are in the business of making money. You, however, are in the business of building YOUR wealth.

First and foremost, it is important to maintain the required minimum balances in your account to avoid maintenance fees or choose accounts with free checking. Giving maintenance fees to banks erodes at building your net worth. The goal is for the bank to give money to you for the privilege of being able to hold your money, so that they can use it.

When you deposit your money into a bank, you are essentially loaning the bank money. You may think the bank can’t do anything with your insubstantial deposit, but that is not true. Your deposit is added to other insubstantial deposits, which equals millions for banks and they take those monies and leverage them. By paying maintenance fees, you are allowing the bank to make money from you in two ways: the maintenance fee as well as the interest they make while leveraging your deposits. I ask you what money have you made from them? If you borrow any money from the bank, you are going to pay interest on it.

Let’s look at overdraft fees for example. Overdraft fees, by far, are the biggest money making fee for banks. Paying NSF fees are a form of borrowing money from the bank, and at an alarming interest rate. For example, say you purchased a cup of coffee for $3.00 and you swiped your debit card to purchase the coffee, but you did not have enough money in your account to cover it. So now you get hit with a $36 NSF fee. $3.00 may seem insubstantial, but the bank just made $36 on it. Banks understand this, and it is important that you open your eyes and understand also. Do you realize that the $36 NSF fee is the equivalent of paying 1200% interest on $3.00 that you borrowed? And let me remind you. You have NOT made any interest on the insubstantial deposit you made with them.

I challenge you this week to Stop the Devourer eating away at your finances and really pay attention to where you are spending your dollars. Also, make a note if it was spending for needed items or for wants. This should cause you to be aware of your choices, so that you can make quality decisions concerning how to save money and avoid bank fees. You can avoid NSF's by putting a spending plan together.

After you put your spending plan together and you discover you still don’t have enough money to make ends meet then you need to review where you can find cost savings. For ideas, check out my blog on Finding $50 of Additional Savings in Your Budget.

Let’s turn NSF's to SWF's. It’s all about the SWF's, BABY!!!

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