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Few things burn me more than being charged an ATM fee for withdrawing my own money so I developed a system that enables me to avoid ATM fees altogether heres how I do it.

When considering a new bank or credit union, look for one that doesnt charge ATM fees.  If they do charge fees be sure they have a system in place that allows you to avoid being charged the fees such as belonging to a nationwide ATM network.

Betsy and I use ING Direct for our main checking and savings accounts and have been able to completely avoid ATM fees.  ING Direct is a member of the All-Point Network of ATMs giving us access to our cash at any Target store nationwide, along with many other locations in every part of the country.  If we need to hit up an ATM we can always find something close.

If youre interested in ING Direct, you can read more about their checking accounts here and more about their savings accounts here or you can read my ING Direct review.

Update: Shortly after publishing this article Ally Bank contacted me to let me know that they reimburse all ATM fees our customers incur in the United States, including those charged by other banks!  If youre interested you can read more about Ally Banks Fee-free interest checking here and more about their savings accounts here.  I also endorse them and have noticed theyve really stepped up their focus on customers over the last few years.

If you are not looking for a new bank then you can employ the final two tactics to avoid or greatly lessen your ATM fees.

Back in November of 2009 Betsy and I attended Dave Ramseys 13 week Financial Peace University course at our local church which inspired us to adopt a cash envelope system for several specific budget categories.  For our situation we decided using cash would work best for:

These categories may not be best for everyone so be sure to figure out what works best for you.

We each carry our own cash and manage it in a way that works best for us.  Betsy carries and uses the Dave Ramsey cash envelope organizer that came with our FPU kit, while I stick to a much simpler system of keeping a wad of cash in my wallet and journalling each transaction to keep track of each category.

I only recommend keeping all your cash together if you journal the spending; otherwise you can easily spend much more in a certain category than allotted.  If youre not going to journal the activity its best to keep the cash separate for each category.

To avoid fees, simply withdraw your cash envelope money once each month rather than hitting up an ATM every time you need money.

Here is a detailed breakdown of how much Betsy and I use for each category:

If you do the math youll see that we need $760 total, so at the beginning of the month Betsy and I head over to Target and withdraw the entire amount.  You may have noticed that she carries a bit more in several of the categories than I do; thats because were usually together and it works out best for us.  I carry my own grocery money for when I have to run to the store by myself to pick up a few odds and ends.

Its also worth noting that ING Direct has a $1,000 daily ATM withdrawal limit; keep that in mind if you use or plan to use ING.  Otherwise be sure your cash envelope amount fits within the daily ATM withdrawal limit of your bank.  If the amount needed exceeds the daily limit simply go to the ATM twice each month, once in the beginning of the month and once in the middle.

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