Brokers Investing Spending The Frugal Handbook

TFH #14: Stress Fees Or Stress Free

No one likes paying fees.

Fees are an additional cost to products or services that, more often than not, we can’t avoid paying, which means that we end up paying more than otherwise if there were no fees.

And I hate the thought of paying more than I really need to.

So, whenever I come across a fee that I have to pay, I try my best to find ways to mitigate it – by looking for an alternative that involves lower fees, finding a way to maximize my reward for paying that fee, or otherwise.

In doing so, it doesn’t feel that bad to be paying fees because I know that I’m already paying less than I would’ve.

But looking for all these ‘hacks’ takes up time and effort that could be spent doing more productive or meaningful things like writing blog posts or spending time with loved ones.

And, if there’s a way to do things to incur lesser fees than usual, it’s probably more tedious than the conventional or standard method, which takes up even more time and effort.

Not to mention that there may also be additional, unnecessary stress that arises, especially if things don’t go according to plan for one reason or another.

This has made me wonder whether all the time and effort spent is worth it for the amount that I manage to end up saving in fees.

On one hand, every dollar saved could be a dollar invested.

Doing it 100 times means $100 saved or invested, and so on.

And even though I could be doing more productive or meaningful things with my time instead of finding ways to save on fees, it doesn’t mean that I necessarily would be – I may just end up spending time watching Netflix shows instead.

On the other hand, while every bit of money helps, would it really make a noticeable difference in my life?

Would I definitely be better off if I had saved, say an extra $100 than otherwise?

I don’t think the answer is a resounding ‘yes’.

And even if I don’t end up spending my time on more productive or meaningful things every time, at least I present myself with the opportunity to.

So I can be sure that at least on a few occasions, I will make better use of my time.

Since there are arguments for both sides, I asked myself when I should and shouldn’t bother stressing over the fees I have to pay, and here’s what I came up with.

Stress when:

  • I will be incurring the fee regularly and frequently (ie commission/FX fees for investing)
  • The potential fee savings are substantial (usually when the fee and/or the principal is large)
  • I can afford to spare the time and/or effort

Don’t stress when:

  • The fee is a one-time occurrence
  • The potential fee savings are minimal (usually when the fee and/or the principal is small)
  • I don’t have the time and/or effort to spare

I think this blended approach of identifying which fees are or aren’t worth stressing over is helpful in making decisions as to how to best spend my limited time and energy.

When it comes to fees, are you team Stress Fees or team Stress-Free?

Let me know in the comments below!

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