Kathy Kraninger, director of the Consumer Financial Protection Bureau, will plan her day around a visit to her bank, just so she doesn't have to pay fees to withdraw cash from another bank's ATM.
Just how much does that type of planning save? A 2018 study by Bankrate found that withdrawing cash from an out-of-network ATM results in total fees of $4.68, both from your bank and the one that owns the ATM. That may not seem like much, but small fees can really add up over time, which is why it's important to be vigilant, says Kraninger.
The CFPB launched the "Start Small, Save Up" initiative earlier this year to provide tips, tools, and resources aimed at helping consumers develop a saving habit and build up a savings cushion.
Being mindful about how and when you spend your money can help you save, Kraninger says: "There are a lot of things that we pay that we don't think about," and they can make a real difference to your bottom line.
Nearly half of Americans live paycheck to paycheck, according to a recent survey conducted by GoBankingRates. Whether or not that's not the case for you, it helps to understand your cash flow — when money comes in and when major bills are due — to avoid other costly fees like overdraft charges, Kraninger says. Bankrate found that the average overdraft fee in 2018 was $33.23.
"Figure out where your tightest time is, and try to mitigate that by managing your spending at certain times of the month when you have the ability to do it," she says. "Timing of when you spend your money is an important consideration."
When analyzing your cash flow, it's important to find ways to improve your savings rate and develop a long-term habit of paying yourself first, Kraninger says. That also means scrutinizing whether some spending is actually necessary — advice that she says "is certainly not popular."
Identifying "the difference between a need and a want" can help, Kraninger says, although which expenses fall in each category may look a little different for everyone. And asking yourself this question is an important step to incorporate in your monthly budgeting, she adds.
While you're looking at your spending, consider how you're paying for those purchases. Using credit cards is an important way to build credit, and it can help save you money. But credit cards can also encourage impulse spending, which is why some personal finance experts recommend paying with cash.
Kraninger learned early on to use credit cards responsibly. "My parents taught me: Don't buy anything with a credit card that you actually can't afford," she recalls.
As you try to master your cash flow each month and increase the amount you're saving, it may be best to use your credit card only when you really need to, Kraninger says: "It's definitely not the best credit product to be relying on on a regular basis."
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