How to Better Keep Track Of Small Expenses And Fees In New Year

In making financial goals for the new year, the approach many people tend to take is to go big. In doing so, they might be missing the small picture.

“These smaller goals become your true financial foundation, a solid base that is crucial for your financial success, especially when you start reaching and planning for the larger goals in life,” said Michaela McDonald, a financial-advice expert at Albert, a finance app.

Ms McDonald says many of her clients have asked for advice to help them achieve lofty financial objectives, but neglecting day-to-day financial health is often the reason people struggle to accomplish even half of their savings goals throughout the year.

For many, 2020 has been exhausting, so it might be tempting to write off little expenses and fees to eschew another headache. But small amounts can matter—here’s how to find and look at the tiny corners of your financial life without getting overwhelmed.

Track down your accounts

Joy Liu, a financial trainer at the Financial Gym, recommends tracking down all your accounts and debts—even the small ones.

“Sometimes, we can unintentionally have little accounts everywhere, so it might be a good indicator that you may need to streamline,” said Ms Liu.

Consolidating accounts can prevent you from being charged a maintenance fee on an account with a small amount that doesn’t meet balance requirements. Americans paid an average fee of $15.50 for not meeting the minimum amount for their interest checking accounts this year, according to Bankrate.com.

Tracking down small debts is crucial to your financial well-being as well. Ms Liu says the best way to do that is by pulling a full credit report to see if you have any unpaid debts. To order a free credit report, visit annualcreditreport.com. Federal law allows one free credit report from Equifax, Experian, and TransUnion a year.

“From there, it’s just opening that stack of unopened mail to track down the other stuff,” she said.

Check on interest

A popular way to save on a bit of interest is to take advantage of 0% offers for a new credit card or balance transfer. These promotions often require a transfer fee, then for a set number of months interest won’t be charged.

If you have taken out any 0% offers on a credit card on another type of loan in the last 12 months, even for a small amount, pay attention when those promotional periods end. There might also be an annual fee for the cards you didn’t have to pay when you initially signed up.

“Make sure you have a plan to either have it paid off by that time or maybe do a balance transfer without being charged interest unintentionally,” said Ms Liu.

Mind the freebies

Perform an audit of your subscriptions, especially the ones which will increase in price in the new year. Some of the most pernicious monthly charges are from apps and free-trials that people forget to cancel or pause.

These charges can quickly add up monthly and prevent people from making headway on their financial goals.

Pay attention to small spends

Tracking small expenses can be time-intensive. There is the traditional way of printing out your credit card statements and highlighting all small expenses under a certain threshold, but it might be easier to let a money app or spreadsheet do the work.

Keep track of small fees as well, for banking and investment accounts. Ms McDonald encourages people to enrol in autopay for bills and other monthly expenses to avoid late fees.

Whether you are using a low-fee robo adviser or a human adviser, check in on whether the management fees or account minimums will change in the new year and whether the difference is worth comparison shopping. If you have been paying a “teaser” fee to try out a new adviser or product, evaluate the results to see if you want to stay with it.