photo credit: Andres RuedaDo you review your credit card statement every month? What about your grocery bill or other store receipts? If you don’t, you are probably not alone – but you should make it a practice to start. I say this because about a year ago I started putting together my family’s monthly budget. As part of that practice, I began reviewing each of our credit card statements to see exactly what we were buying so I could categorize each expense. Don’t get me wrong – I had always reviewed our credit card statements to make sure everything seemed to be in order. However, I never took a detailed view of our expenses. On my first detailed review of our monthly credit card statement – I realized that we were paying $10 every month for some rewards club that I had joined several months before. This was a legitimate expense, but for something I never used and had forgotten about. I immediately canceled the membership to the club and removed that monthly expense. Too bad I hadn’t realized it sooner – it could have saved us over $100!

In today’s tough economic climate, I think it is so important to pay attention to the fine details of your credit card statement, grocery bills, and even your utility bills. A few months ago, we received a higher than normal water bill. I took a look at the information on the monthly statement and assumed that it was legitimate since it was from the city we lived in. Plus, we had been watering outside a little more to bring in some new grass seed. What I didn’t catch was that the water usage for the month was consistent with previous month, but the bill was almost doubled. The city had upgraded to a new software package and had a glitch in sending out the first set of bills. They took care of the problem and notified their customers on the next bill. The important thing is that the information was right in front of me. We had been charged almost double for the bill and I didn’t catch it. I didn’t pay attention to the fine details of the monthly statement.

One area that my wife and I specialize in paying attention to detail is when we are grocery shopping. Cashiers are human and tend to make mistakes. When my wife and I go grocery shopping we have a plan. One of us watches the prices of the products when they are scanned to make sure it comes up at the correct price. The other one pays attention to the cashier to make sure there are no double scans. Once we check out and have paid, we scan the grocery receipt in fine detail to make sure that everything looks accurate. I can’t tell you the number of times we have caught a .50 cent overcharge or double scan at the store. I figure most people don’t care about .50 cents here or there – but overtime that can add up.

The point of these examples is that there are little buckets of money that you could be saving here and there. Sure – an overcharge of .50 cents at the grocery store doesn’t seem like much. But I can tell you that it will happen to you again. Is it worth your time to pay attention to the details on your receipts and monthly statements to save money? I believe that it is. Even if you save $5 every month – it is worth it (to me).

Another benefit of paying attention to the detail of your expenses is that it puts everything you purchased right in front of you. Several months ago, I had a bad habit of buying a 20 oz. Diet Coke for lunch everyday at work for $1. Sure that $1 every day seemed insignificant. But when you look at that charge on our monthly credit card statement – it looks a lot different. When I see that $1 charge come up on my statement 5 days per week and over 20 times per month – it seems a lot different. Simply paying attention to that detail forced me to cut that expense out. I have since saved over $20 per month just by paying attention to detail. I always knew how much it cost making these purchases. I just started seeing it in a different way when I paid attention to the details.

I believe that paying attention to these fine details will also help you address areas of your budget that you can cut. It gives you direction on expenses you can work on eliminating or at least cutting back on. If we spent $1,000 per month on groceries and wanted to cut it to $750 – I can take all of our receipts and lump them together. At that point I can identify certain areas were we can cut back. This approach may not work for everyone as there is added time involved – but it has worked for my family and added up to some significant savings.

How detailed do you get with reviewing your finances?

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Using a credit card rewards program can be an effective and easy way to earn extra money each year. Depending on your usage and spending, a diligent card holder can earn several hundred dollars every year in redeemed gift cards are prizes. As long as you remain committed to paying off your balance each month and can avoid over spending on items you don’t need, there are few downsides to these programs.

I wanted to touch on an important point however that sometimes gets forgotten when it comes to credit card use. Even if you stick to your monthly budget when using your credit cards and payoff the balance each month, you still could be losing money. When was the last time you actually sat down and reviewed each expense on your statement?

Taking the time to review your credit card statement each month is just as important as paying off your balance. As you will read below, I learned the hard way.

Check Your Monthly Credit Card Statements

Over a year ago I signed up for a coupon rewards program that offered free products and discounts for signing up. The first month for this service was free and then cost $10 per month thereafter. My intentions at the time were to sign up and get the free rewards and then cancel at the end of the first month.

About 12 months after signing up for this program, I began to monitor my credit card statements more closely. While my wife and I have kept a decent handle on our spending and pay off our balance every month, we only casually reviewed our monthly statements. We usually just took less than a minute to scan the charges to make sure nobody had gotten a hold of our card.

It wasn’t until I started to review each line item and compare multiple months of statements that I realized I had never canceled the coupon service. I had been charged an extra $10 each month for a service that I never used. While $10 per month may seem like a small amount of money, the $120 we lost in the 12 months time made us take notice.

Saving More Money

The point of this story is to not get lazy when it comes to your personal finances. I had gotten complacent about always checking every expenditure on our credit card statements. It wasn’t until we looked at exactly what we were spending on the card to make us realize we needed to fill a hole in our finances of $120 per year.

We have since canceled the coupon service and no longer will be billed the $10 fee each month. As my wife and I work towards saving 10% of our income, it is important to pay attention to the small details of our finances. The more of these small expenditures that we can find, the easier it will be to save $400 per month (or 10% of our current income).

Monthly Savings – $10

I encourage everyone reading this to start taking their finances seriously. Even if you think that you are always on top of your spending, double and even triple check your statements. Start with your checking and savings accounts. Then move on to your monthly credit card bills. You may be surprised at how much you can save just by eliminating wasted expenses like the one I just mentioned.

Have you ever discovered wasted expenses like I just mentioned by reviewing your statements?

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I have long been a supporter of using rewards credit cards as a way to earn points and cash back on our purchases. Every year my wife and I accumulate enough points to redeem a few hundred dollars back that we put towards holiday gift purchases. In the past, there really wasn’t much concern on our part by using credit cards to make all of our purchases so we could earn this extra money. However, this all changed a few weeks ago when I read one of our monthly statements from our Discover Open Roads credit card.

The Discover Open Roads card earns you 5% cash back on up to $100 in gas and car maintenance purchases every month. That translates into $60 of extra income each year, just by purchasing gas! My family uses this card strictly for our gas purchases as well as any extra incentives offered by Discover to earn points.

Several weeks ago I was reviewing our monthly statement and noticed an extra $1.09 line item charge for what Discover calls – Payment Protection. I then decided to go back and double check my previous months statements to see if this charge showed up and sure enough it did! I found it on the previous three months statements ranging from $.86 to $2.72. I immediately called a representative to discuss the matter.

Turns out these extra charges were a “protection plan” offered by the card in case I lost my job and couldn’t make my payments. Discover would wave any interest on the card in the event I could no longer make my payments for up to 24 months (or something like that). How nice of Discover to offer to not charge me any interest if I couldn’t pay my bill by actually charging me a monthly fee!

After arguing with the customer service representative for several minutes about “how” and “why” I automatically got signed up for this service – they waived the charges going forward and gave me a refund for the prior months charges. Apparently, I was sent a notification that I needed to opt out of the program by a certain date or I would automatically be signed up for this program. I am not saying that I never received the notification, but I know I never read anything like that.

The point of this story is that banks, credit card providers, and several other companies are starting to add these extra charges and hidden fees to their customers. This is certainly a way to recoup the money they have lost during the credit crunch and recession. While an extra $1 per month fee on our Discover card is not going to make us go broke, it reduces the 5% we would have been getting back on the card to under 4%! If I new that before opening up an account with the company – I probably would have decided against it.

Where to Look for Hidden Fees and Extra Charges
As mentioned earlier, I found this extra fee that started showing up on our Discover credit card recently that I did not know I was being charged for. While credit card companies are known for this type of behavior, there are several other providers and companies that have a tendency to add on these extra charges to the consumer.

Here is a list of providers and companies that may try and charge you extra money on your bill -

• Credit Cards
• Banks
• Hotels
• Airlines
• Cable TV providers
• Cell Phone providers
• Home Phone Providers

Final Thoughts
While the credit card companies and banks are up to some unethical tactics, I believe it is the consumer who needs take responsibility for what they are charged. Ultimately you have the final say in opening up a new credit card or taking out a questionable loan from a lender. While these extra charges or fees may be hidden, they can normally be found in the fine print. You should also pay attention to the details of your monthly statements on credit cards and other utility bills that are not a fixed payment every month. Check up on questionable charges and call your provider to make certain you understand what you are being charged for.

I will leave you with one additional item I found on my Discover card recently. I started reading the important messages that are sent to my online account. The most recent message highlighted changes to my account. In the past I choose not to read these as I pay the bill off every month and didn’t need to worry about different interest rate charges and late fees. However, the most recent message noted that we would be charged an extra 2% fee on all purchases made outside the United States. While I don’t make any of these types of purchases, I was glad I read that message.

What additional fees have you started noticing on your statements in the past several months?

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