Nickel and Dimed

I’ve been on a mission to fix my finances for a little over 2 years. Admittedly the amount I spend and save and my overall relationship with money has never been healthy. Although I’ve worked in the banking industry for over 25 years, surrounded by personal finance experts, I developed terrible money habits. The results of these habits reaped fantastic rewards for the financial institutions and lenders I borrowed from, but that unfortunately is where the positive ends. I’ve wasted more money than I care to add up, nickel and diming myself for years. Small amounts of my hard earned money have trickled, unnoticed, out of my economy through various routes including unused, but paid for, memberships, late payment fees and high interest rates. After I became aware of my problem I embarked on a quest to correct my behaviour and money habits in the least painful and most fruitful way possible.

The Day of Giving

I live in a relatively small town and telecommute for work. Grocery stores, banks, the dentist and a pharmacy are all within a super convenient 5-minute drive. One sunny afternoon during my lunch hour I ran some errands and noticed that almost every single place of business I went to asked me for a donation.
On my way into the grocery store I was greeted by volunteers representing a well-known, national organization. They stood in the vestibule, boxes with coin sized slits hung around their necks, and requested a cash donation from every person that walked by. While checking out the cashier asked if I would like to donate one dollar to a local charity. On my way home I went through the drive through of my favorite coffee chain and was again asked to donate to a charitable cause.
Back at home as I began making supper an individual complete with pamphlets and a clipboard knocked on my front door asking for a donation, one-time or recurring, to a world renowned children’s hospital. Then while eating our meal that same evening, my two children informed me their school was running a magazine subscription fundraiser and they also needed some canned goods for a local food drive.
All of these requests occurred in less than 5 hours.

I completely respect the need for donations to schools, food banks, hospitals, summer camps and kids’ clubs, and, I admire the people who volunteer their time to these causes. However, I am also frequently overwhelmed by the expectation that I must, or should, hand money over almost everywhere I go. When I don’t donate I am consumed with guilt.

Approximately a week after what I now think of as my day of giving I had an errand to run at a nearby shopping center. I exited the highway and noticed a homeless man on the narrow shoulder, he carried a large cardboard sign that indicated he was out of work and any little bit would help. While at the mall I was offered a loyalty membership card in order to receive a discount on my purchases in two different retail stores, one card was free, the other was not.

There are thousands of charities and millions of people all over the world that need help and financial support. If I could afford it I would give money to every single person and organization that asks, but the my personal bottom line is I can’t, and more importantly, I shouldn’t.

When does it become too much? Am I allowed in today’s disdainful and easily offended world to say that it has become too much for me? Inevitably I had to learn to know when and what to say no to.

Awareness of the Problem

I am a healthy single mom with healthy kids and earn a respectable income, but, I don’t have a substantial amount of money saved, and every dollar I spend counts. $5.00 and $10.00 donations eventually add up and have a negative impact on my budget.
It was important for me to devise a way to reconcile my desire to help with the reality and limits of my budget. I had to first determine my priorities, then review my outgoing expenditures and see how it all fit together.
My budget review alerted me to how on top of the fulfilled requests for donations, I actually nickel and dimed myself on a monthly basis. The random dollars I donated to charity wasn’t actually the biggest drain on my bank account. Rather the problem was that I was paying an exorbitant amount of money for my cell phone plan, cable TV subscription and internet connection. I was maintaining two bank accounts each with a monthly service fee, both of my credit cards charged an annual fee as well as a relatively high interest rate and I had memberships in 4 streaming services as well as a monthly audiobook membership. I belonged to a gym when to be perfectly transparent I hadn’t been to the gym in over a year. My savings account was debited over $50.00 a month to receive a box of “lifestyle” products, which include skincare and beauty products, even though I rarely wear makeup and am allergic to more than half of what I’ve received so far. Between fees, high interest rates and duplicate or unneccessary services, money was trickling out of my bank account.

The Fix

It was time for me to clean up my budget, reign in my spending and stop blaming others for nickel and diming me when my lack of financial engagement and oversight was actually the worst offender.
I cancelled 3 of the 4 streaming memberships, the audiobook club membership and the monthly membership for the “lifestyle” products. I called my internet service provider and asked for a discount, noting that I used more than three of their services and had been a loyal customer for over 10 years. I researched credit card offers on Giraffeplan.com and found a card that offered 0% interest for the first 6 months with no annual fee.
Next, I reviewed my bank accounts, read the small print and compared all the fees and charges then ultimately closed one of the two accounts. I switched to an online bank that doesn’t charge any account fees and offers 3% interest on a savings account for the first 6 months after account opening. Not only am I saving on monthly fees, I also earn more on deposits.
All in I managed to save over $140 a month simply by paying attention, placing a few phone calls, switching accounts, cancelling unnecessary memberships and conducting online research.

I’ve learned my lesson on nickel and diming even though it took me years and thousands of wasted dollars.

The first step to avoid being nickel and dimed is to be aware of all of your outgoing expenses. If you don’t have a budget, that is the best place to start. If you already have a budget then a regular review is meaningful and worthwhile.
Do your research. There are a myriad of credit cards, bank accounts and loan options available to you. It is amazing how much money you can save, and earn, by closing or switching to a different account and provider.

Donations

By removing and reducing some of my monthly costs I feel better about donating to various charities and causes. However, money is not the only method of giving. You can volunteer your time and skills, or donate gently used clothes and household items.

The decision-making process regarding what, how much and to whom you donate is different for everyone and there is no end to worthy receipients, both local and international. If you decide to donate money I suggest you thoroughly review your budget and determine an amount that is comfortable and manageable. By determining a set amount in your budget it’s easier to know when to say yes, and when to say no.
Read the small print for all of your account agreements, and most importantly, stay aware of where your money is going. You probably can’t do it all either, unless of course you can.

I recently read on Money.com that Bill Gates donated $4.6 billion dollars worth of his Microsoft shares in August of 2017. He and his wife, Melinda Gates, were named the most generous philanthropists in the U.S.

We compiled a list of a few charities in Canada and the United States. This list is in no way complete and does not represent all of the charities and causes that accept donations.

CanadaUnited States
Ride for the CureUnited Way
Terry Fox RunYMCA of USA
Canadian Wildlife FederationSalvation Army
Habitat for HumanityWorld Vision
Canadian Cancer SocietyAmerican Cancer Society
CNIBBoy Scouts of America
Canadian Red CrossThe Humane Society of The United States
Humane Society of Canada

If you have a story about being nickel and dimed, exorbitant account fees, or how you’ve made changes in your financial life, please share with us. We’d love to learn more about your experiences and how you deal with money.