In Cash Flow, Debt Management, Financial Planning, Personal Finance

Having enough money to fund your life today and your future financial goals are greatly affected by how you manage your cash flow. After all, if your money isn’t given a purpose, it could easily get spent away on frivolous things that don’t align with your needs or your vision for your future.

And it’s one thing to spend your cash on things like coffee and eating out, but what about the expenses you don’t see? Do you even know how much money you spend a month or a year on fees, finance charges, interest, and similar types of expenses that effectively bring you zero satisfaction and no step closer to funding your financial goals?

Here are some of the most common finance charges people pay and how it can impact your bottom line.


Subscription and Membership Fees

Subscription fees can add up, and if you’re not using them, they are a waste of your money. A monthly charge of $10.99 from Netflix may not seem like a lot, but if you don’t even have the time to watch Netflix, why spend the money? That adds up to $131.88 a year that could go toward anything else you may need.

Newspaper and magazine subscriptions, association dues, gym memberships, club memberships, online service subscriptions like, Spotify, or Angie’s List (silver & gold membership plans) –  All these things come with a price tag ranging in price. And if you have a bunch of unused services rolling through your credit statements every month, it’s like throwing cash out a window.


Credit Card Fees

If you aren’t paying your credit card bills on time, you are getting hit with a late fee of around $39. On top of late fees, you will also be charged your annual APR for any unpaid credit card balance, and that APR average 15.96%.

So for simple illustrative purposes, say you had a credit card balance of $1,000 and didn’t pay it off by the due date, if you don’t pay it at all you’ll be hit with a late fee plus around $159 in interest! So that $1,000 in purchases now costs you around $200 more. That’s a 20% penalty just because you didn’t pay your bill.

You can imagine how significantly credit card fees can impact your overall financial well-being and undermine long-term financial goals.


Investment Fees

Depending on your investments and who you invest through, you should be aware of certain fees like the Investment Advisory Fee. These are typically the fees a financial advisor will charge clients to manage assets and can either be a flat fee or a percentage of assets (known as AUM).

The fees you probably don’t see are the ones issued by the fund managers, expense ratios, and transaction fees. They don’t show up on a statement, but they are taken from your account to pay the cost of participating in the fund. Some types of investments come with a higher price tag, and so it’s important to understand your all-in costs before you invest.

Over a long-term investment period, fees can eat away at your potential gains because the money that could be working and compounding for you is siphoned off to pay managers. Therefore, how you invest is just as important as investing in the first place. Who wants to pay more for something they could get less expensively somewhere else? This same logic applies when it comes to investing.


Closing Thoughts

Minimizing wasteful spending is a smart financial discipline to adhere by, and eliminating fees can be the least painful way to save more money. So, before you cut out the lattes from your budget, see if you’re overspending in fees and resolve to get rid of the ones you absolutely do not need.



Saving for the future doesn’t mean you can’t enjoy your life right now. With a little planning and a lot of intentional actions, you can enjoy a certain lifestyle AND meet your future financial goals. Find out how in the next installment of FRANKly SPEAKING.

As always, I invite you to reach out to me – in real life – with any comments, feedback, or questions!  [email protected]


Disclaimer: The information contained in this article is for informational purposes.  None of the information provided in this article is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. Please consult with your accountant, finance professional, and/or legal counsel regarding your specific circumstance. Reproduction of this material is prohibited without written permission from Frank Shields, and all rights are reserved. Read the full Disclaimer.

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