Sponsored content by Lemonade Insurance Company
If you’re in the habit of buying stuff you don’t need, like signing up for gym memberships you never use, you might also be paying too much for things like bank fees, loans, and insurance. No matter if you’re living the single-life or juggling a few rugrats, you’re likely to have a few important admin tasks that may have slipped under your radar.
Most companies have such complicated terms and conditions that it’s just easier to throw our hands up in the air and pay the earth — definitely simpler than having to read the small print.
So here are 3 quick ways you can be smarter with your money – and save in the long run.
1. Avoid extra bank fees
Banks are notorious for overcharging you. A 2017 study by the CFPB estimates that banks make $17 billion a year in overdraft fees alone. And according to a 2018 survey by Consumer Reports, 37% of respondents were charged a hidden banking fee in the last two years. While it’s impossible to get rid of bank fees altogether, a few small tweaks here and there can help you save money.
Decline overdraft protection. Overdraft protection means that if you ever try and take out more money than you have from your bank account, it will take the remaining balance from a linked account. Although seemingly there to protect you, overdraft protection charges you a transfer and overdraft fee — even if you have the money to back up. It’s just simpler to decline overdraft protection, and if you’re short, make a direct deposit from your savings account into your checking account using your banking app.
The average maintenance fee for a checking account is $14.76 a month. That doesn’t sound like a lot, but monthly fees can add up. To avoid paying maintenance fees, check whether your bank will waive the fee on the condition that you keep a minimum balance in your account.
Banks will ironically charge you for not using your bank account! It’s called a ‘dormancy fee.’ Usually, this happens after an average of 6 months, and naturally, your bank won’t warn you about the charges! To avoid this fee, set a reminder in your calendar every few months to make a withdrawal or deposit.
2. Find an insurance company with reasonable rates
While it’s super important for you to have either renters or homeowner’s insurance, it doesn’t have to be crazy expensive or difficult to research. Take Lemonade, an insurance company designed for the 21st century that offers insurance policies for renters starting at just $5 per month and homeowners starting at just $25 per month.
Traditional insurance companies try to hold onto as much money paid through premiums as possible (that’s how they make their mind-boggling profits), which can make it hard to get the money you need quickly and in full.
Lemonade is different. Lemonade takes a fixed fee out of your monthly payments, pays reinsurance (and some unavoidable expenses), and uses the rest for paying out claims. So the premiums you pay are treated like your money, and any leftover money is donated to charities you choose in the company’s annual ‘Giveback’ program.
While homeowners insurance starts at $25, that doesn’t mean you’re skimping on coverage. Your ultimate price will depend on factors such as your home’s size, location, and age; and the coverage amounts you choose. It’s just that Lemonade, which uses bots instead of brokers and algorithms instead of paperwork, has cut the usual overhead and can offer comprehensive coverage at an affordable level.
3. Get an app to cancel subscriptions you keep forgetting about
You might have used Amazon Prime for the first 3 months, but a year has passed, and you’ve completely forgotten about it. Or you excitedly signed up to Netflix and spent the winter months binging all your favorite tv shows, but on-demand streaming has lost its charm, and you’re not really using it any longer. Subscription services are super fun, but they’re less fun when you’re paying for something you don’t use.
To keep on top of your subscription payments, download a subscription management app, like Bobby and Butter, which tracks your subscription signups, especially those you forgot you made! If you want to go above and beyond getting a handle on your subscriptions, download apps like Truebill and Trim that help you take charge of your finances. Not only do they take a good look at your bank account situation, but they can also negotiate better deals from companies you already use, like cable companies and cell phone deals.
Never give up
There are endless ways to help save yourself a buck or two, and although it can feel like a struggle — never give up! Remember, every dollar adds up, and using multiple money-saving hacks can save yourself a fortune!
Written by Deb Moher
Deb is a content creator at Lemonade–a renters and homeowners insurance company powered by tech and driven by social good. When she’s not writing about insurance, she’s rocking it out in a local band, and chilling with her dog Winnie.