Over the last decade, ‘nickel-and-dime’ fees have become the normal course of business at many of the largest banking institutions.  Some of the tricks that these banks use to squeeze more fees out of account holders have angered law makers and consumers alike, but this has not stopped the banks from instituting more fees that do little more than line the pockets of the bank’s shareholders.  Here are some of the most devious tricks the largest banking institutions use to remove money from your accounts to be placed into their own.

Checking Accounts

• Authorization Holds – Authorization holds are holds on the funds in your checking account to pay for debit card purchases that have not yet cleared, but the problems occur when the holds are for more than the person has actually spent.  Because these funds are being ‘held’ by the bank, they are not removed from the account balance, but if the person spends more than what available after the funds being held are deducted, then they may be hit with overdraft fees even though they have not spent the full amount in their checking account.

• Transaction Reordering – Transaction reordering occurs when banks process transactions from highest to lowest instead of in the chronological order that the transactions were actually made.  This increases the chances of lots of little overdrafts, for which the person is fined $35 per occurrence, instead of one large overdraft.

• Zero Balance Fees – Zero balance fees are charged on accounts that have been overdrafted, emptied by the consumer, or emptied by the bank for fee charges.  This fee is charged for everyday that the account balance is zero or negative, causing people that depend on a biweekly paycheck to incur many fees before their next paycheck is deposited.

• Exit Fee – This is a fee that is charged for closing your account.  If you are tired of the fees that your bank is charging and decide to move your money to another banking institution, you cannot simply remove your money or the bank will begin charging you a zero balance fee.  You must close the account entirely.  There is no reason for an exit fee other than to penalize consumers for moving their money elsewhere.

One of the most difficult financial decisions to make is how much you should be saving for a comfortable retirement.  There are so many unknowns looking that far into the future that many people are so unsure of what to do that they do nothing at all.  Finding the balance between preparing for tomorrow and sacrificing luxuries today can be hard, but by following some simple rules of saving, you may be able to save enough for retirement while still enjoying the quality of life you desire today.

Financial experts recommend that between 10% and 20% of your income be put away for retirement savings and the percentage that you choose to save will depend on what you would like to do during your retirement and whether you will have any other sources of income during your retirement years.  Here is how each of those saving percentages will affect your retirement years.

10% Of Earnings Saved

Saving 10% of your current earnings for retirement should be enough to cover the basic necessities of your retirement years.  Saving 10% is recommended for those who anticipate having other income streams during their retirement years that will be able to supplement their retirement savings or plan on working part time during their retirement years.  10% of current earnings is a reasonable estimate for basic retirement necessities if you begin saving for retirement before you reach the age of 30, but if you begin later in life, you will need to add another 5% of earnings to your savings to make up for the amount not deposited in earlier years.

15% Of Earnings Saved

Saving 15% of current earnings in a retirement fund should allow you to maintain your current quality of life during your retirement years.  This amount should cover all of your regular household expenses plus enough for small luxuries like occasional meals in restaurants or trips to the movies. This amount is recommended for individuals that plan on relaxing or following inexpensive hobbies during their retirement years.

20% Of Earnings Saved

If you plan on spending your retirement traveling from state to state or seeing exotic locations, no less than 20% of your current earnings should be placed into your retirement account.  If placed into an interest bearing retirement savings account, you will have a significant amount saved for your retirement.  Traveling is expensive and gets more expensive every year so it is best to plan accordingly and save as much as you can to be able to live the lifestyle you would like after you have retired.

You can have an IQ bordering the genius level and still make dumb mistakes with your investments.  Some of these mistakes are due to not thinking things through properly while others are the product of years of emotional manipulation by marketing companies or trusted friends and family.  Here are some of the dumbest investment decisions that people make and how to avoid them.

Holding On To Bad Investments

It can be difficult for some individuals to admit to themselves that they invested money into the wrong business, but this denial can cause the loss of a significant portion or all of the money invested.  Others choose to hold onto bad investments because they were inherited from a loved one or because of loyalty to the company.  Unfortunately, this is a disaster that happens frequently and these people lose most if not all of their investments. 

No more than 10% of your money should be allocated towards any one stock and your portfolio should be diversified with several different types of investments to ensure that you are not wiped out if one or two companies fail.  For each stock, you want to identify a price level at which the stock will be sold if it falls to that price and stick to your own recommendations.  This way, you will limit the losses on any investments that go bad.

Chasing Hot Stocks

Many investors make the mistake of chasing hot stocks just as they are about to turn cold, paying an inflated price for the stock and losing most of their investment in a fairly short time period as the market for that stock begins to cool.  If a large number of professionals are publicly singling out a stock for great returns, chances are that the stock has reached its peak and will begin to decline as multitudes of investors chasing a hot stock pour money into the investments.  Investments like these seldom pay investors more than they initially invested and often cause the loss of most of the money invested.

Not Doing Your Research

A large number of investors have investments in their portfolio for no other reason than a source that they trusted called the investment a good deal.  Without doing some independent research into the stock, there is no way to tell if the stock is really a good deal or if someone is trying to convince you to buy junk to increase the price of the units the individual recommending the stock holds.  It is best to investigate any stock tip for yourself and come to your own conclusions about the value of the stock you are considering.

Advertisers have made an art out of making something seem like it is a great deal, especially when it is not.  There are tons of phony bargains out there waiting for you to spend your hard earned money on them, but being able to identify them for what they are will make you much less likely to fall for the tricks.  Here are some false bargains that you can definitely do without.

Frequent Flyer Reward Credit Cards

When these credit cards first hit the market, they were the latest thing and their popularity skyrocketed to where nearly everyone who flew periodically had some type of frequent flyer reward credit card.  Now that the novelty has worn off, many people are seeing that these credit cards are not such a great thing after all.  In the intervening years, the benefits have shrunk, the number of seats available has decreased, booking fees are imposed for most flights, and the number of miles needed to redeem a reward has increased dramatically.  A better choice would be a reward credit card that offers cash back on your purchases so you can choose what to purchase with that money.

Interest Bearing Checking Accounts

A checking account that earns interest for the account holder sounds like a great deal – until the terms and conditions of the account are read.  Most interest bearing checking accounts offer a very small interest rate, often less than 0.25%, but require high minimum balances to avoid monthly maintenance fees on the account.  For example, the average minimum balance for these checking accounts is $3,400, an amount that will earn less than $5 in annual interest, but dropping below this amount could cost you $25 per month in maintenance fees for the account.  You are much better off opening a free checking account that does not pay interest and has a much lower minimum balance requirement.

Going Out Of Business Sales

Many people go to “going out of business” sales expecting to actually see fire-sale prices, but this is often not the case.  In order to make as much money as possible, many closing stores advertise sale prices that are not much different from the prices you would have paid before the liquidation started.  Price shopping competitors will quickly show you that there is not much difference in the price and you may be better off buying the item from a competitor that will be around long enough to handle any issues that arise with your order.

An important part of successful financial planning is planning for retirement and the earlier you begin, the better off you will be.  There are a wide variety of investment opportunities available to choose from for retirement planning with one of the most popular being the Roth IRA.  Since its introduction in 1998, the Roth IRA has offered investors a tax-free investment vehicle that they can use to save for their retirement years.  There are a number of advantages and disadvantages to Roth IRAs and knowing what they are will help you make the decision of whether a Roth IRA is the right investment for you.

Roth IRA Advantages

One of the biggest advantages of a Roth IRA is the simplicity of setting up the account.  Most people are able to provide the information required for a new Roth IRA within minutes and can set up their account with minimal effort.  There are a wide range of options for investing the money contributed to the account and the account holder is not penalized for withdrawing funds that they have contributed to the account before the age of 59 ½.

Account earnings up to the amount of $10,000 can be withdrawn from the balance of the account to assist with the down payment for a home, as long as the home will be your primary residence.  You can elect to have the Roth IRA transferred to a beneficiary in the event of your death and the beneficiary can combine that account with his or her own Roth IRA penalty free.  With a Roth IRA, you do not have to start taking money from the account once you have reached a certain age and can save the money in the account for as long as you desire.

Roth IRA Disadvantages

One of the biggest disadvantages to a Roth IRA is the strict income limitations that must be adhered to open and maintain an account.  If you do not meet the income limitations, you will be unable to open a Roth IRA and if your income increases past the limit, you will no longer be able to contribute funds to the Roth IRA.  Roth IRA contributions are taxed on the front end and do not reduce your adjusted gross income for the year like regular IRAs and other retirement plans.

Annual contributions to a Roth IRA are capped at $5,000 per year for individuals that are under the age of 50 and are capped at $6,000 per year for individuals that are 50 years old or older.  Earnings from the account can be withdrawn prior to the age of 59 ½, but you will pay a withdrawal fee of 10% for extracting the earnings from the account.  There are many advantages and disadvantages associated with Roth IRAs and each should be taken into consideration before making the decision of whether to open an account.

Shopping is when we’re most likely to spend our disposable monthly income, and more often than not we will waste some of our money on items that we don’t even need. If you can adopt a couple of money saving methods when you’re shopping, you can save yourself a lot of money.

It’s important to remember that when we save money, we put are savings to good use by using a high interest savings account. With a savings account of this type, the more money you put in, the more you will get out in terms of interest.

There are loads of high interest savings accounts to choose from on the money market. An example of one in the US could be the LSA or Lifetime Savings Account. If you’re UK based like me then the UK equivalent would the ISA savings account. Wherever you are based, make sure you do your research to find out what’s your best option.

Here are some simple money saving tips that you can use the next time you go shopping, and remember every little bit helps.

Search online before you shop

It’s a fact that most products will be cheaper online rather than in-store, so make sure you have a look online before you venture out to shop. If you’re looking for a specific product then you can use a shopping price comparison website to find you the cheapest price. They will do the hard work for you and detail the cheapest price from all the leading retailers.

Use deal and voucher code websites

Using deal and voucher code websites are a great way to save you some extra cash. If you’re looking for a specific product then you can take a look on some deal websites to see if there are any current bargains that suit you. Also, there are thousands of voucher codes available on the web that help you to save, so take a look at some websites that offer them and keep an eye on anything that suits your shopping needs.

Stay away from unnecessary purchases

Sometimes these are called impulse purchases; they are items that you don’t intend to buy when you go out shopping, yet you see the product and buy it even though you don’t necessarily need it. These products can really up your total shopping bill, especially if you have a habit of buying impulse products on a regular basis, try and stay away from them wherever possible.

When you shop take a list with you

A great way to avoid expensive unnecessary purchases is to prepare for what you need before you go shopping. Take a look around your home and look for what you need and make a list. Take your list with you when you go shopping and try to stick to it, you may be surprised how much you save.