At some point, most of us have had that experience where we realize we don’t have as much money in our savings account as we thought we did. Here is a look at three of the most common and simple money traps that should be avoided to prevent leakage from your bank account.
Recurring Fees Billed to Credit Cards
This one happens to most people quite often and usually goes unnoticed for a few months. It actually happened to me not too long ago. I was a member of a fitness club here in Dubai and set up automated billing to my credit card. I decided to stop attending the club but forgot to request a cancelation of my membership. After a few months I began reviewing my credit card statements and found the recurring monthly membership fee was still being charged. This could be chalked up to forgetfulness.
There are a few solutions to these kinds of situations. Other than not using your credit card for membership payments, you could also put a reminder in your budget plan for items that are a continuous, important expenditure. This will force you to think about it the next time you are reviewing your budget. Another option, if available from your bank, is to place a spending ceiling on your bank account so that you only have a certain amount to spend per month. This will also force you to review your account expenditures.
ATM fees are a real killer when it comes to money traps. Many times you may be out with friends or at the mall and your bank’s ATM is at the other end of the mall and you just do not feel like making the trek, so you use another bank’s ATM and get slapped with extra fees. Even doing this a few times per month can add up to a hefty sum at the end of the year. Within the UAE, most banks will levy an AED 2 charge for using an ATM outside your bank’s network. For every checking account and savings account listed on bayzat, you can see the entire fee schedule for ATM transactions.
As the UAE banking and commerce industry continues to expand their technological reach, debit cards are becoming more important. These cards can be used as a substitute for cash and will not garner the fees that an ATM would. Moreover, when you do visit an ATM, get into the habit of withdrawing more than you need so that you are not strapped later on.
Buying on Impulse
Yes, impulse buying is a real money trap. If you engage in this kind of buying on a regular basis, you could be spending hundreds or even thousands of Dirhams per year.
Impulse buying is purely a psychological phenomenon. The brain feels a sense of thrill by obtaining something that it has wanted. The next time you are about to make an impulsive purchase, try to recall an item that is just sitting in your home, rarely being used, and think about how this next impulse buy could be doing the same thing in a few weeks.