Joe Orozco
Person holding fan of US dollars

Do Not Do These Six Things If You Want to Protect Your Money

Do you enjoy watching your money dribble away needlessly? I don’t either.

These are just a handful of bad practices that erode your finances.

Don’t Leave Your Money Parked in Money Transfer Services

If you split a bill with a friend, you might get money sent to your Venmo, PayPal or similar money transfer service. These services are great at moving cash across platforms and devices, but leaving the money parked in these services does nothing for your returns.

Instead consider moving the money out of this type of service into an interest account, preferably a high yield savings account, but even the measly interest checking account is better than zero growth.

I have friends who like to leave a stash of cash in these services as a way to easily pay someone else when it’s their turn to send someone a transfer. I would advise against this strategy, because if there is ever a dispute or security breach, I have a little more faith in my bank to sort it out than I would a service like PayPal. Good luck trying to reach customer service there.

Don’t Pay Fees for Money Transfers

Closely related to the previous point, don’t pay fees to transfer your money, if you can help it. I’m picking on PayPal here, not because I think it’s exceptionally bad, but because it’s the service I use most often.

Unless you’re facing an actual emergency, don’t pay fees for instant transfers. With PayPal, for example, you pay nothing to move money to your bank in less than three days. I often get my money in one or two days.

Zelle is a good option if you want to move money from one bank to another instantly and without fees. I’ve been using the service for about a year now and have never experienced issues.

Don’t Pay Fees If You Can Avoid Them

If you pay for Internet, don’t pay for the provider’s modem if you can get away with it. With Comcast, for example, I bought my own modem for around $60. Had I rented a modem from Comcast, they would have charged me something like $5 a month. I’ve now been with Comcast for three years, so I would have paid Comcast $180 just for the modem itself.

If you order out, don’t pay unnecessary fees for services like DoorDash, Uber Eats, etc. This is assuming the restaurant you want to order from has its own delivery service. There’s a Chinese restaurant in my area I’m pretty loyal to. Even though they’re on the popular food delivery platforms, I order from them directly, because their fees are lower and all the money goes toward their business.

I’m always astounded at how Uber Eats sells me on 20, 30 and sometimes even 50% off coupons. By the time I go to check out, I realize I’m about to basically pay the same amount after they’ve tacked on their local fees, delivery fees, restaurant fees, and taxes.

This fee reduction mentality also applies to late fees, overdraft fees, maintenance fees, activation fees, credit card processing fees, shipping fees, resort fees, and any other fees you can find a way to eliminate from your bills.

The best time to negotiate is at the start of a service exchange. Sticking with the Internet example, ask them to waive the activation fee before you agree to use their service.

The best time to minimize, or eliminate, a hotel’s resort fee is before you check in, and if they don’t budge, be prepared to check out alternatives.

Don’t Pay for Things You Rarely Use

Why would you take out a membership fee to a gym, or virtual exercise program, if you know in your heart of hearts you’ll rarely, if ever, take advantage of it? No judgment here, just a gentle nudge to keep that subscription money in your pocket.

On the other hand, do the math. If you use a service enough, it might be worth taking out a membership plan to eliminate certain fees. I don’t exactly enjoy paying $119 for Amazon Prime, but as much as I use Amazon, the membership pays for itself after calculating shipping costs.

The same is true of streaming services. I’ve been itching to jump on a Netflix subscription plan, but until I’ve adequately exhausted my current options, I’m going to postpone that a little longer.

That said, remember that for services like Netflix, you don’t have to keep the subscription plan active forever. The key is remembering to cancel it when you’re no longer utilizing it.

Don’t Pass on Loyalty Programs

No one should ever eat out just to reach a restaurant’s reward milestones, but if you’re going to eat out, you may as well earn the little perks along the way. It coincides with my philosophy of earning credit card reward points since you’re going to spend money anyway.

Signing up for a restaurant’s reward program is usually an easy step. If you’re afraid of an uptick in email marketing and potential spam, you can always use a separate email account kept just for purchases.

If you use Uber or Lyft, don’t forget to link your account to your hotel loyalty program. Marriott and Hilton are major chains with properties in most destinations you’re likely to visit. It would take a lot of rides to score a significant bonus toward these hotel loyalty programs, but remember, every little bit counts. And if you’re going to rely on Uber or Lyft anyway … Well, you see the pattern.

Here’s my caveat when it comes to hotels. Unless you know you’re going to stay at a hotel enough nights to reach one of their elite levels, it’s usually better to find the best rate and use a good rewards credit card to rack up points that way.

Use partnerships like the Lyft and Uber hotel partnerships when they exist to add points to your hotel loyalty programs, but when it comes to paying for the final bill, use a good rewards credit card unless you travel enough and are loyal enough to specific chains.

Don’t Become Your Friends’ Free Ride

J. Wellington Wimpy was a character in the Popeye comic strip. Described as “a lazy coward, a miser, and a glutton,” his most famous catch phrase was: I’ll gladly pay you Tuesday for a hamburger today.

Are there people in your circle who make an art of not paying their way on outings? Do they seem to forget their wallet when the check comes due at the end of a meal? Do you often find yourself stuck paying the bar tab at the end of the evening?

Once is a mistake. Twice is suspect. Three times or more and you’ve got a skunk in your midst, and skunks have got to go.

You work hard for your money. Any friend who routinely uses you for your money is probably a friend worth keeping at arm’s length. If they’re having difficulty keeping up with the cost of your activities, it’s better to have a conversation about less expensive alternatives they can afford than to continue this awkward arrangement that can easily build resentment.

Final Thoughts

There are plenty of things in life over which we have no control. The way we spend our money sometimes falls into that category what with the inevitable curve balls life throws our way, but that doesn’t mean we are completely helpless to stopping those little perpetual leaks from our bank accounts. Block these little gaps, and you’re more likely to see your money grow and work for you than drain you.

What else would you add? Trust me, this short list is only scratching the surface.

Sound off in the comments!

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My blog is a collection of advice I wish someone had shared with me when I was young and targets subjects like personal finance, careers, and relationships. It publishes Mondays with the occasional bonus article. Sign up to have fresh content delivered straight to your inbox, no SPAM!

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