Canadian Personal Finance Blog

After posting yesterday’s best of: Free Banking post, I received my monthly balance sheet from the bank for my bank account, and dutifully I went into Quicken and ran my monthly reconcile of my chequing account. At the end of the document from the bank it had this very interesting statement:

You have saved $72.50 in Service Charges this month

I beg your pardon? The statement reflect that if I was paying for the $12.95 a month TD program, that I might not be paying for right now, I have saved $72.50. If I was gouged for $73 in bank service charges for a month, I’d start putting my money in a mattress or carrying it around in my shoe.

Then I started to wonder is there anyone out there who actually pays that much a month to the banks? I really hope that is not the case, as you saw yesterday, I think it’s ridiculous to pay $13 a month, $73 a month would be highway robbery. What services could be worth that much?

• Tellers deliver money directly to my house?
• Bank Manager drops by and helps clean out my garage for the spring?
• FREE MONEY! (two words I love to see)
• Interest payments that amount to more than a single bus ticket in value?

Given none of those services are offered by my branch of TD, my guess is those service charges of $73 are fiction, since no one would pay it, would they?

This is why I invest in banks.

Snow and Flooding

With the snow pack in Ottawa disappearing the flood planes of Ottawa are filling up quickly. My area of Ottawa is less likely to flood, however, I am not that far from the Mighty Jock River so there is a chance yet.

How much does flood insurance cost? What does it cover? Is it better to just invest in a sump pump? I have a good shop vac for small wet spills, but if my basement floods, I would have to run to Canadian Tire to get a real pump!

Is flood insurance worthwhile? Opinions?

Last year about this time, I wrote about one of my favorite fights that I have most every year, and that is my fight to not pay banking fees. Some years I win the fight, some years I am forced to pay the exorbitant fees the banks wish I pay, can you guess what happened last year?

Free Banking?

Last night, my wife and I went for our yearly meeting with our current bank to move some money around, update our kids’ RESPs and to attempt to receive Free Banking. My wife was sure that this was not going to happen, and that we were going to walk out of their empty handed, and I would be ranting about how we have to change banks. I guessed I might get something, given I had some compelling arguments, so we had a friendly wager(my wife taking the “We are going to continue paying bank fees” side of the bet) for a sweet treat at a local food establishment.

Now if you don’t remember my compelling arguments were outlined in yesterday’s posting: Changings Banks? but I thought of 1 or 2 other arguments just in case.

My extra arguments that I thought of on the spot during the discussions were:

• If I walked into the Bank of Montreal down the road, and say, I’d like to transfer all of my banking to this branch today, if you give me free banking for a year, I am sure they would comply with my request (and if they didn’t I could simply go to the Scotiabank in the same mall and ask them for the same deal).
• Why if I was a new client, you would give me a free iPod which retails for about $130, yet as a customer in good standing, you expect me to pay $156 a year to use your bank?

The meeting was quite cordial, and we got the banking we needed done, and we were very happy with the service that we received, but when we were left alone, my wife was still adamant that we would not get any concessions (and I was starting to wonder if she was right).

The counter points made by my bank representative were:

• PC Financial and ING have no service charges because they are virtual banks and have much lower overhead, due to them not really having “branches”. This is an interesting argument, except that PC Financial isn’t even really a bank, it is a FRONT to CIBC right now.
• There is a policy not to give free banking services to anyone, since this is a business. As a share holder in TD I am glad to hear that, since I like seeing companies I invest in profit, however as a customer I am not happy to hear that.
• An implied argument, but never stated directly was, “If I give YOU free banking, everybody will want it”, which is very true.
• If I carried the minimum balance in my checking account (I think it is $1000) I would get free banking (i.e. no bank fees would be charged), so why wasn’t I doing that? I pointed out $1000 in my bank account does me little good, but $1000 paid on my debts, does a great deal of good. My guess is if I ever get out of debt, I will carry a balance and get free banking (of course by then I will get the Senior Citizen discount).

What was the final resolution of this discussion? Well, I promised the bank representative that I would not say, and I will abide by that agreement.

Later in the evening I did enjoy the Dairy Queen Blizzard that my wife bought for me, and I will enjoy it for the entire year.

I was running low on ideas and asked my wife for a topic for today’s blog and she came up with the cost of our “free” education system. She had been out shopping for back to school supplies (a HUGE industry in itself) and was telling me about all the “bargains” she was going to have to find to pay for all of the unwritten educational expenses.

Not Optional

These are expenses you can’t escape from and you MUST pay:

• $45.00 yearbook & agenda/year fee which is not optional (per child). My kids in High School can’t even get their schedule before they pay this fee.
• $10.00 for the agenda at my elementary daughter’s school
• Class fees for individual classes:
  • Art fee $25.00
  • Music Fee $25.00 not to do with the instrument rental
  • Musical instrument rental or purchase which can be anywhere from $100 to $800
  • Physics Fee $10
  • Tech Fee $30
  • Music Fee $35.00

Not that much I guess around $100 - 200.00 per child all due in September.

Optional Expenses

These are the added expenses that you can try to not pay or find ways around them, but some are more optional than others. An example would be I can’t really not buy bus passes for my daughters who go to a school a 20 minute drive away, but I will include them here for the sake of fairness in the model.

• Yearbook fee of $15.00 for elementary/middle school
• $200.00 since one of my daughters plays on the school basketball team
• Food
  • Pizza $45/child/3 months
  • Juice $38/child/3 months
  • Pita Bread $40/child/3 months
• Class photos $40
• Team fees for athletics $20.00
• Team fees for football $32.00
• Team fees Curling $50.00
• Tournament fees for basketball $115.00
• Skiing $60.00 for club
• End of year camp $187.50
• Gym Fees $24.00 for self defense
• Team fee softball $45
• Monthly Bus Passes $58.00 per month Per Child
• Band shirt $25.00

The bus passes are tax deductible luckily, but a lot of the school athletics aren’t really covered under the new “active child” tax credit, and you can see these expenses can be anywhere from $100-$800.00 for a child over the year.

Now this does not really include things like:

• Pencils, pencil cases, crayons and such
• Paper, binders and the like
• Computer, and computer paper
• Clothing for the start of the year

Anybody else know why I don’t have any money in September? Just take a guess.

Last night, my wife and I went for our yearly meeting with our current bank to move some money around, update our kids’ RESPs and to attempt to receive Free Banking. My wife was sure that this was not going to happen, and that we were going to walk out of their empty handed, and I would be ranting about how we have to change banks. I guessed I might get something, given I had some compelling arguments, so we had a friendly wager(my wife taking the “We are going to continue paying bank fees” side of the bet) for a sweet treat at a local food establishment.

Now if you don’t remember my compelling arguments were outlined in yesterday’s posting: Changings Banks? but I thought of 1 or 2 other arguments just in case.

My extra arguments that I thought of on the spot during the discussions were:

• If I walked into the Bank of Montreal down the road, and say, I’d like to transfer all of my banking to this branch today, if you give me free banking for a year, I am sure they would comply with my request (and if they didn’t I could simply go to the Scotiabank in the same mall and ask them for the same deal).
• Why if I was a new client, you would give me a free iPod which retails for about $130, yet as a customer in good standing, you expect me to pay $156 a year to use your bank?

The meeting was quite cordial, and we got the banking we needed done, and we were very happy with the service that we received, but when we were left alone, my wife was still adamant that we would not get any concessions (and I was starting to wonder if she was right).

The counter points made by my bank representative were:

• PC Financial and ING have no service charges because they are virtual banks and have much lower overhead, due to them not really having “branches”. This is an interesting argument, except that PC Financial isn’t even really a bank, it is a FRONT to CIBC right now.
• There is a policy not to give free banking services to anyone, since this is a business. As a share holder in TD I am glad to hear that, since I like seeing companies I invest in profit, however as a customer I am not happy to hear that.
• An implied argument, but never stated directly was, “If I give YOU free banking, everybody will want it”, which is very true.
• If I carried the minimum balance in my checking account (I think it is $1000) I would get free banking (i.e. no bank fees would be charged), so why wasn’t I doing that? I pointed out $1000 in my bank account does me little good, but $1000 paid on my debts, does a great deal of good. My guess is if I ever get out of debt, I will carry a balance and get free banking (of course by then I will get the Senior Citizen discount).

What was the final resolution of this discussion? Well, I promised the bank representative that I would not say, and I will abide by that agreement.

Later in the evening I did enjoy the Dairy Queen Blizzard that my wife bought for me, and I will enjoy it for the entire year.