BUDGETINGLIFESTYLE & TRAVEL

Budgeting for Unexpected Fees

Budgeting is an important factor in achieving financial success, but there are obstacles that can stand in your way. Everyone knows about emergencies: those unexpected financial shocks that can throw your budget out of whack. But there is another unexpected expense that isn’t often concerned: fees. Hidden fees are, for the most part, far less impactful than something like an emergency, but they still should be accounted for and there are plenty of ways to do just that.

What are some fees to be aware of?

There are hundreds of different fees you may encounter in your life. Among those are a few that you’ll likely see more than others.

A few examples of some commonly encountered fees are:

• Delivery fees on food ordered through services
• Credit card fees: annual fees and late fees
• Fees from your financial institution: overdraft fees or fees to open and maintain an account
• ATM fees that can be charged for using an ATM that doesn’t belong to your financial institution
• Airline fees: choosing your seat or having additional bags
• Hotel fees: amenities (that fully stocked mini-fridge isn’t free)
• Ticket fees, often called service fees

Of course the hope would be that all these hidden fees could be avoided, but sadly that’s not often the case. With that in mind, there are some ways to handle all these fees.

Keep your eyes peeled

Some of these fees aren’t hidden, or as hidden as they may appear. For instance, fees from your financial institution must be made public so their members or customers can see them. That is why it’s essential to keep your eyes peeled. A hefty fee could be hiding right under your nose.

Shop around

Some fees are hidden until the very end of the purchasing process, only appearing once you’ve been hooked by the advertised price and are close to finishing checkout. If you continue even with these fees, you may end up paying far more than you would have if you had gone with a competitor. That is where shopping around becomes important. Of course it takes more effort, but being afraid to take the extra steps to shop around and find the best price can cost you far more than the time you saved.

Build a cushion in your budget

You may be unable to determine what you fees you’ll have to pay when you plan a purchase, but if you’ve included the purchase in your budget, then planning for fees takes only one fairly simple step. Typically the easiest way of going about this is to set aside a little extra money for that purchase so when those fees come, you’re ready. If you’ve encountered similar fees before, setting aside the right amount of money shouldn’t be much trouble. But, if this is your first time making a purchase, then it’s up to you to do your research and estimate an appropriate amount. In the end, the important thing is that you factor fees into your spending. It’s better to be at least a little prepared than not being prepared at all.

For more information on fees, visit: https://www.consumerreports.org/fees-billing/protect-yourself-from-hidden-fees/