Bad History with Banks Making You Want to Change Financial Direction

Saving money can be difficult, but with the right guidance putting away emergency funds can help deal with an unexpected repair bill you can’t afford. However, one the hardest parts of saving money is to overcome all excuses for not doing so already.

If you want to put away money for a rainy day, experts generally recommend saving roughly three months of your current income. Depending on how much you make, this total can vary significantly. This way, if you encounter a life event, such as job loss, this will be able to take the pressure off of your budget while you figure things out.

Excuse: You Have A Bad History With Saving
You may have tried to save money in the past, but had little success. However, this shouldn’t be your excuse for not trying now, says U.S. News and World Report.

Over the years, your financial situation can change, making it more important to put money away. For example, if you have children or a new car that could need repairs in the future, putting away cash is that much more important.

Additionally, if you have hopped around job positions in recent years, you may be earning more now than you did in the past, which can also make it easier to start saving.

Excuse: You Have Too Much Debt
Debt payments can make it difficult to put money away. This includes financial obligations, such as auto to students loans to credit card debt. However, over time, the more debt you pay off, the more you should be able to save.

As you pay down debt and reduce your balance, the amount of interest you owe is subsequently reduced, resulting in smaller monthly payments. With this money you save, you could put it into your emergency fund to get the ball rolling for additional savings.

Excuse: The Economy Makes It Difficult To Save
This is one of the oldest excuses in the book, but every generation has certain economic trials they must overcome. Although you may spend more money on everyday items as wages remain stagnant, you need to reassess what you’re spending your money on.

If you regularly make small purchases that you can live without, consider cutting these costs from your budget. While these may not seem like very much on their own, they can add up to a considerable amount of money over time.

Excuse: My Spouse Spends Too Much Money
If your primary excuse for not saving money is that your spouse spends too much money, it’s time for a discussion about your finances. It’s much easier to save money if you both you and your spouse are on the same page.

Additionally, if your spouse’s spending is a subject of tension, this could develop into bigger problems later on, so it could be beneficial to address any problems before it ruins your relationship.

Creating A Savings Account Could Be Viable Solution
Once you whip your budget into shape, it’s time to make a place to start accumulating your savings. This could come in the form of a high-yield savings account, which would allow your money to grow and mature by collecting interest.

Make sure you emergency fund has it’s own account separate from your everyday account. This can reduce any temptation you may have to spend you money on unnecessary items.…

From Bank of America’s attempt to charge $5 monthly for debit cards to Chase’s $20 billion loss on a bad trade, the press surrounding traditional banking has made consumers weary.

Throw overdraft fees, hidden charges and poor customer service into the mix and most are left wishing for the days of stuffing cash in a mattress.

According to the Washington Post, 821,000 households dropped out of the banking system between 2019 and 2021 amidst the recession.

But for many accustomed to the average checking and savings account system, joining the ranks of the 17 million unbanked consumers can be a bit unnerving. Anyone considering a departure from their banks should consider a few of the options available before they choose to go bank-free.
Where do the “unbanked” put their cash?bad banking history calls for a change

The safety and ease of a bank is a leading reason for going the traditional route with cash. Daily Finance reports that a check-cashing store in New York charges $18.60 to cash $1,000 and $93 to cash $5,000 – a nearly two percent fee for depositing. Banks on the other hand usually allow free direct deposit, eliminating the trip to a cash-checking store and the service charge.

On the other hand, Time reported that this year a spike in bank fees swept the nation. Overdraft fees neared $30 and the average cost to use a non-network ATM rose to $3.68. While individually, these fees are less than the cost to cash $5,000 the potential to accumulate multiple charges each month is greater–making it easy to surpass $93.

For many, cashing checks and utilizing traditional accounts is a game of choosing the lesser of two evils. But other options remain.

Prepaid cards have become increasingly popular and companies like Simple are working to provide a bank feel without the unpleasant corporate additions.

Stephen A. Sam, CEO of Tri-Fin Services, weighed the pros and cons of leaving a bank.

“On the one hand, you might be able to find more attractive rates of return on your money,” says Stephen. “However, not having that brick and mortar convenience of going to an ATM and getting less overall security can be a pitfall.”

There are multiple options for those ready to leave the banking system, but it’s important for consumers to understand their own deposit and withdrawal needs and find an alternative that best suits those habits.
Is it the consumers or the institutions?

While banks certainly have a share in the blame for the expense and problems that lurk in the traditional structure, consumers must also take some responsibility. The UK just found that financial illiteracy costs their country £3.4 billion ($5.48 billion) a year. And the US has zero bragging rights over the UK when it comes to financial literacy, as our financial education structure is equal to if not less than that of our neighbors across the pond.

Ultimately, the trouble lies somewhere in the middle according to Michael C. Meyers of Truth in Equity.

“The banks themselves are not the problem; it is what they teach us about managing our personal finances and the relationship they have with our money. It’s how we use banks that is the problem,” says Meyers.

Where to deposit wages and the smartest way to withdraw those funds will always be a struggle because there’s no one perfect way to do it. Backing a choice of banking services with a strong understanding of personal habits and the products that are available is the only way a consumer can find the right fit for their finances.…