Happy new month everyone. The year is gradually winding down and now is a great time to review one’s financial achievement. Some of us may not be happy with our current financial status, but the good news is that, it is never too late to turn things around.
Is your financial goal to save and invest more, or to make more money? The first step to taking charge of your finances is the decision to start now. So no more procrastination, just start the process. You can find useful tips HERE and HERE.
A new client requested that I look through her bank statements for the months January – June 2015. I helped her categorize her debits and she was surprised when her total monthly bank charges came to about 3% of her monthly inflows. Sometimes these charges are so minimal that people ignore it, but when the pieces are pulled together it can amount to a huge amount.
So take for instance, your total inflow for the month is N500,000 monthly. Monthly bank charges @ 2.5% is N15,000. Over a period of 12 months that amounts to N180,000.
Some of the bank charges to watch out for are listed below:
- SMS alert – You can opt out of this and subscribe for email alerts which are free for most banks. In my case, I was paying for sms alert meanwhile I not utilizing the services because I changed my phone number and did not update with the bank.
- Debit card fee – Depending on your bank, some banks charge a monthly maintenance fee.
- COT – If you run a current account, this charge is inevitable, how ever if you are a business owner, you can negotiate with your bank to reduce the rate charged per mil. If you are a salary earner, you can change your salary account to a savings account which is what I did. I use my online banking platform to transfer funds so I am not missing my cheque book. I however, transfer some money to my current account on a monthly basis just to ensure it remains active.
- Online transfer charges – Most banks charge N105 for transfers to other banks, a lot of Nigerian’s have more than one account, so when possible request for an alternative account.
- ATM withdrawal fee – CBN scrapped this fee in the past when withdrawing from other banks , but it has been reintroduced again. After the first 3 withdrawals, subsequent withdrawals on other banks ATM cost N65k per transaction.
- Limited cash deposits transactions – This is most applicable to business owners, banks charge if you go above the limit for cash deposits. You can request your customers to pay cash deposits that are above the limit over a period of days, or better still insist on a cheque deposit, or online transfer.
- Returned cheque charges – For business owners that are fond of giving out cheques even though their account isn’t funded, this charge can silently eat into your money. Some banks charge N200 for every cheque you do not honor.
- Fees & charges on loan facilities – Be sure to read your offer letter properly, banks charge various one off fees on loan facilities asides the interest. These fees and interest rates can be negotiated.
So next time you receive your bank statement, make sure all fee transactions are correct and that you are not paying for services you do not need or have not requested for.