Even a Small Leak Can Empty Your Money Bucket Quickly

Small bits of money can add up over time and become significant chunks of cash. This is a big benefit when it's small bits that we save, but hurts when it's small bits that we spend. This piece from Marketwatch demonstrates how these little bits can add up.

For instance, take the small costs associated with using cash machines that aren't a part of your bank's network:

The Fall 2005 Checking Study released last week by Bankrate.com showed that the cost for using the "wrong" bank machine has reached an all-time record, with the average total fee now standing at $2.91.

That figure covers the $1.54 average fee assessed by the banks that own the ATM you are using, and the $1.37 average fee that banks charge customers who use a foreign ATM (and almost 70% of banks now charge customers this secondary charge).

Bankrate.com estimates that consumers will pay more than $4.3 billion in fees this year, just for withdrawing their own money in a way that most people justify as "more convenient."

Are you kidding me???????!!!! $4.3 billion???!!!!!! Ouch!!! See, small amounts can really add up.

But many people only look at the per transaction amount and don't see it as that significant. Instead, they should be looking at the total expense over time. Here's the situation:

So it's not "only a buck." Two trips to a foreign ATM per week, and it's about $300 bucks over a year. In a home earning the nation's median household income, that's more than one half of one percent of all the money brought in for a year.

It really does add up. In fact, it adds up to a pretty big number. But that's not all, there are other bank fees that cost you a lot by taking a bit here and a bit there. For instance:

Beyond rising fees, it's clear many consumers simply are unaware of what is happening in their own accounts. Fee-change notices tend to arrive from banks attached to statements, and most people hardly pay attention to their bank statement, let alone balancing their checkbook to reconcile all of those little fees and see just how quickly they add up.

Yes, it's certainly worth it to pay attention to these fees -- and other recurring small charges that eat away at your income. Though they seem insignificant on a per transaction basis, over time they have a significant, negative impact on your ability to accumulate wealth. Watch out and guard against them -- don't let them be a drag to your net worth.