Saving for a deposit – how to avoid unnecessary fees and charges
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RAMS’ ‘First Home Buyers’ Pulse Check’, conducted in February 2009, found that both first home owners and first home seekers shared the feeling that saving a deposit was the greatest hurdle they faced when looking to buy their first home. In fact 80% of respondents said that they saved ‘bit by bit’ to get their deposit, with 87% saying that they had been building their deposit through regular savings efforts rather relying on gifts or loans from family.
When you look at the different fees and charges that you may be getting on your bank accounts or credit cards each day, it’s easy to find quite a few ways in which you can save small amounts that add up. And at the end of the month you have more left over to boost your deposit savings.
Try these tips and see how they can help you save more ‘dollars and cents’:
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- Keep an eye on your account balances – avoid the fees that are incurred when you have insufficient funds in your account to cover transactions and purchases by regularly checking your account balance at ATMs or by using telephone or internet banking.
- Choose a financial institution that doesn’t charge exception fees – exception fees are those fees charged on savings and credit card accounts for such things as dishonoured cheques, late credit card payments, overdrawn accounts and exceeded credit limits. There are some bank accounts that do not incur exception fees (ask your financial provider if you are eligible).
- Switch off the ability to exceed your credit card limit – some financial organisations will switch off the ability for you to exceed your limit on electronic purchases and cash transactions, so you can’t ‘over-max’ your credit card.
- Pay your minimum monthly credit card fee by the due date – you can either pre-program your credit card payment or put a reminder in your diary noting when your credit card payment is due. If you make sure you pay the minimum monthly payment, you will avoid extra transaction fees.
- Find out if you can get SMS alerts – your financial institution may be able to provide you with SMS alerts that will notify you of all transactions, either successful or unsuccessful so that you can keep an eye on your account activity.
- Find out if you can get a ‘sweeps’ facility – your financial services provider may be able to provide you with a ‘sweeps’ facility for your accounts which will automatically move funds from one account to another when a direct debit is presented that may put your account into overdraft.
- Be aware of the type of ATM you are using – it is best to make sure that you use either your own financial organisation's ATM facilities or those that are ‘fee-free’ for your bank. Check if your finance provider offers an SMS service that allows you to SMS a suburb and a telephone number and the bank will send you the addresses of ATMs in your postcode range.
- Use EFTPOS to get extra cash – avoid account transaction fees by withdrawing cash via EFTPOS when doing your supermarket shopping.
- Don’t authorise costly transactions – if you are conducting an ATM transaction at a ‘non bank’ ATM, the ATM operator fee will be shown on the screen. If you don’t want to pay this fee for using an ATM that is not affiliated with your financial institution, don’t proceed with the transaction. If your banking provider doesn’t have a wide spread of ATMs, speak with your financial provider to find out how you can use ATM facilities without incurring extra operator fees.
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