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Woman using ATM, Canon 1DS mark III

When Americans criticize financial waste, they should point an accusing finger at themselves, starting with money needlessly spent to get at their own cash:

  • Americans use ATMs nearly 6 billion times a year, according to a recent Federal Reserve study.
  • Some 30 percent of those transactions are out of network, says a report by personetics.com.
  • The average out-of-network charge is $2.77 per transaction, according to the statistics website Statista.
Add it all up, and that billion-dollar-plus bill highlights just one example of how often consumers spend money on fees they could avoid.

“Hands down, the No. 1 fee that consumers should avoid at all costs is paying to get your own money,” said Reshell Smith, a certified financial planner in Orlando, Florida. “You should never pay an ATM fee or anything that resembles an ATM fee.”

In addition to ATMs, late fees, overdraft charges and annual credit card fees are other expenses consumers pay — and don’t always have to — to access their cash or credit.

A costly habit

Ironically, accessing cash plays a central role in Americans’ propensity to pay charges and fees that can easily be avoided. A recent study by Tufts University titled “The Cost of Cash in the United States” estimates that American households lose some $43 billion a year as a result of using, among other things, check-cashing services and out-of-network ATMs that levy a surcharge.

The first cash-saving strategy is to avoid check-cashing services whenever possible. The math is painfully obvious: With fees ranging as high as 5 percent, cashing a $1,000 paycheck immediately lops off $50.

“Sometimes in life, you may be in a desperate situation and your only option is to use a check-cashing service,” Smith said. “But beware, because you’ll pay a pretty penny.”

Instead, open a bank account that charges minimal or no fees if your balance drops below a certain amount or for overdrafts. Several institutions, such as Charles Schwab and First Republic, have eliminated overdraft fees completely.

The second strategy is avoiding ATM fees. Ask your bank or credit union where its ATMs are located to ensure you can access a cost-free network whenever possible. Ask your institution if it is part of a national ATM network so you can get cash when traveling.

“Make sure that you bank with an institution that will give you easy access when you need cash,” Smith said.

Cost-effective investing

Getting people to save enough for a comfortable retirement is a challenging proposition. A 2015 survey by the Employee Benefit Research Institute found some 28 percent had less than $1,000 set aside for retirement.

That decision to save is not made any easier when even well-intentioned savers end up paying steep management fees levied to administer their 401(k)s and other retirement programs.

“When a company offers its workers a 401(k) plan, it usually hires an outside firm to manage it, and they charge a certain percentage known as administrative and management fees,” said Tom Till of APPS Financial Group in Houston, Texas. “And some 401(k) plans have higher fees than others. Most people are spending a few hundred dollars a year.”

Even seemingly modest fees can add up. In a recent PBS Frontline story, Vanguard Funds founder John Bogle noted that a retirement fund earning 7 percent a year with 2 percent in annual fees would lose some 63 percent of its value over a 50-year period. Use this calculator to determine how much retirement investment expenses may be costing you.

Till urges consumers to review their retirement program to select options with the lowest expenses. If decoding a prospectus is confusing, have someone in human resources walk you through it. If your plan only offers expensive choices, try lobbying your employer for a different plan with more cost-effective options.

That holds true for any sort of investment. A regular program of mutual-fund investing can offer significant long-term rewards, but even the best-performing funds can be dinged by high expenses. According to a 2014 analysis by Morningstar, the average mutual fund charged investors 1.25 percent of the value of their holdings. By contrast, inexpensive options such as index funds can offer big savings (for instance, the Vanguard Total Stock Market Index Fund Admiral Shares charges a skinny .05 percent).

“Consumers need to learn the true cost of their investments,” said Stephanie Genkin, a Brooklyn, New York-certified financial planner. “On a $250,000 portfolio, do you really want to lose $2,500 annually to own funds charging 1 percent, or are you better off putting your money in a few index funds charging much lower fees?”

Credit cards on the cheap

Credit cards are infamous for their battery of fees and other charges. A survey by CreditCards.com found that the average credit card carries six different fees, ranging from late-payment penalties to foreign-transaction surcharges.

Consumers should carefully examine and compare each card’s lineup of charges and fees. One such charge that can easily be avoided is an annual fee, which can be as high as $500. That can be skirted by shopping around for a card that’s annual fee-free. CompareCards.com has a list of cards with no annual fee here.

Other charges, such as late-payment fees, can be avoided by making those payments one time. Set up an electronic payment system with a bank or other financial institution that can ensure timely, regular monthly payments on revolving credit.

Just ask

Another way to avoid paying late charges — and to get rid of other fees — is to ask. Particularly persuasive is a long and clean history with the institution charging the fee.

“I can’t tell you how many times I have seen financial institutions waive fees just because the customer asked,” said Idowu Koyenikan of Grandeur Touch, a strategic planning and training concern in Raleigh, North Carolina. “If you have been with a particular institution for several years, it’s also advisable to push the loyalty button: ‘I’ve been a valuable customer for X amount of time; would you please look into waiving this fee for me?’ ”

Another tactic Koyenikan pointed out is dangling the prospect of additional business in return for eliminating fees.

“Obtaining new business is a top priority for many institutions,” he said. “With a bank, for example, you can ask about opening up additional bank accounts, rolling over an existing IRA or investment account. Many times, this new source of revenue is enough to offset the fees that you are asking to be waived.”

Jeff Wuorio lives in Southern Maine, where he covers personal finance and entrepreneurship. He may be reached at jwuorio@yahoo.com, and his website is at jeffwuorio.com.