The new forums will be named Coin Return (based on the most recent vote)! You can check on the status and timeline of the transition to the new forums here.
The Guiding Principles and New Rules document is now in effect.
**ANSWERED- PLEASE LOCK!** Living bank-account free
-Spitfire-
Registered User regular
Registered User regular
Well, after being screwed over (yet again) by my bank, I've decided I want to live bank-free. I realize this will be difficult, but to be absolutely honest I have never profited from keeping my money in a bank (what with service charges and so forth) and I really think it would be more beneficial for me to look after my money on my own.
Obviously there are a few considerations, including how I will cash my paycheque. As I understand, I can cash the paycheque at the issuing bank (which is conveniently right up the road from me) so that shouldn't be a problem. I have also heard that government cheques, such as income tax returns, may be cashed at any bank.
Another consideration is, what is the most effective way to store my money, now that it won't be in a bank? What is the most secure type of safe to buy (other than a number of different types of safes in different locations)?
Has anyone else here done this? If so, what else am I missing out on here that I need to set up alternate arrangements for? What am I missing? It seems like it should work, with a little extra effort, but there may be some pitfalls of which I am currently unaware...
Obviously there are a few considerations, including how I will cash my paycheque. As I understand, I can cash the paycheque at the issuing bank (which is conveniently right up the road from me) so that shouldn't be a problem. I have also heard that government cheques, such as income tax returns, may be cashed at any bank.
Another consideration is, what is the most effective way to store my money, now that it won't be in a bank? What is the most secure type of safe to buy (other than a number of different types of safes in different locations)?
Has anyone else here done this? If so, what else am I missing out on here that I need to set up alternate arrangements for? What am I missing? It seems like it should work, with a little extra effort, but there may be some pitfalls of which I am currently unaware...
-Spitfire- on
0
Posts
How will you pay your bills? Getting money orders is a waste of money when you could write a check. Safes are less safe than insured banks. It's going to take you a long time to save up for a car, or home. etc.
How much money are we talking here? I think that'd have a huge impact on your decision making.
Seriously, the drawback of being extremely studious about your finances (and I'm not sure why so many consider it a drawback, I personally think it builds great life habits) intensely overrides the myriad inconveniences by living quasi 'off the grid'.
CUZ THERE'S SOMETHING IN THE MIDDLE AND IT'S GIVING ME A RASH
I was going to post that exact same thing.
I'm not trying to dump on you, because god knows that there was a time when I would get charged overdraft fees every other month or so because I wasn't careful with my money. But seriously, going without a bank is a bad idea. I don't know how many bills you pay, but I like the ease of paying everything online, even the day off when it's due. That won't be something you can do if you keep your money in a safe.
Maybe you should think of ways of managing your money more carefully?
The following is an anecdote speaking only for my institution; always do your own research on your own bank.
My credit union automatically signs customers up for 'overdraft protection.' The idea is that the bank will cover you for up to $400 should you overdraw your account. In reality the bank is loaning you money with a ridiculous interest rate. My bank's fee for this 'service' was initially $25. As of March 2008 it is $40. They've also raised these fees without telling customers. I know because I read and keep every piece of paper they ever send me, because frankly I do not trust them.
This is only one of many shady practices I've discovered at my institution. I've heard much worse horror stories from companies such as Capital One and Chase. However other posters are correct. For your bank to capitalize on your errors you must make the errors first, however often times these errors occur out of extenuating circumstances through ultimately no fault of your own. Some banks are nice and might offer you a one time 'get out of shit and get your money back' option. Past that they can be very unforgiving. Rightfully so it is a business afterall.
I agree with you OP in that banks are hardly out to help their customers. But congress is acting right now with a law to protect consumers from things like 'overdraft protection.' My advice is to shop around your area for something local. Do as much research as possible and find an institution that fits you right. Do not attempt to manage your own money. I feel your pain as I have had to learn the very, very hard way to properly manage money and I'm still learning. However keeping your stash under your mattress is not a good idea.
Shogun Streams Vidya
http://www.amazon.com/Honeywell-55-Cubic-Foot-Anti-Theft-Digital-2050/dp/B000GB3CBM/ref=pd_bbs_sr_2?ie=UTF8&s=office-products&qid=1220409153&sr=8-2
Yeah, the bank will rape you if you drop the soap, but if you don't drop the soap they won't touch you.
In addition to the FDIC/you're gonna get robbed shit everyone else is saying, checks create a paper trail. So, say your landlord decides to be a dick one day, and says he's evicting you, because you haven't paid your rent in three months. What are you going to say? "Oh, I totally gave him $2000 in cash for those three months." Prove it. There's no way you'd be able to. Whereas, if you had the checks you'd written, you'd have an established record for having paid your rent.
Also how will you ever buy a car or a house or post secondary education
CUZ THERE'S SOMETHING IN THE MIDDLE AND IT'S GIVING ME A RASH
And yeah, banks are going to charge you for cashing any check when you don't have an account with them.
"Pay for it in cash" isn't likely to be an option. Aside from the fact that hauling the $20,000 that car will cost you around is a huge risk if people find out about it, many reputable businesses will be suspicious of large sums of cash. Not to mention the police - few people traveling with that kind of change on them got it by legitimate means. Having hundreds of dollars on you during a routine traffic stop can be used as justification for all sorts of hassle, even if you do end up being let go. Police searches have a way of severely damaging cars.
I think this is already common practice.
At any rate, living bank-free will ruin you in so many different ways; that paper trail thing is very important not only for proving your innocence against an unscrupulous landlord, but also in renting a place to begin with, or getting a car loan, or getting a mortgage.
Generally speaking, it's not hard to avoid fees on accounts; the one rule is this: don't overdraft.
If you can't avoid that, not having a bank isn't going to help you. I'd suggest, maybe, keeping a savings account at the very least that you can't easily draw on, if you keep overdrafting.
And service fees are usually because you don't have a minimum balance in your bank account (Bank One was like that). Just try another bank like Compass or WaMu and see what they can offer you. Heck, even trheaten to leave your bank and they will offer you another account that can reduce minimum balances and such.
The other nice thing you ask? No fees. In fact, I've actually got a small net PROFIT from the interest in my accounts from them.
That said, there are things you can do to limit your banking use if you want... say, withdrawing all the money you're going to spend that week rather than use your debit/credit card for everything. That's what I do, and I've got to say, it's fantastic for helping you stick to a budget. Once the money for the week is gone, you can't spend any more.
Also, some banks are VASTLY better than others. If you're so worried about being screwed, shop around.
seriously, not having a bank account and keeping your life savings in a safe beside your bed is possibly the stupidest thing I have ever heard. Going to keep your retirement fund in your house? seriously?
Banks make your life safer in general, and as said above, they tend to screw with you only because you messed up.
And, since I'm a finance-ish major, I have to say that holding on to your money yourself is screwing yourself. You know how banks credit you interest and how inflation slowly decreases the value of your money over time? Yeah, those two pretty much cancel each other out with something like a savings account. However, the money in a safe besides your bed won't have the benefit of interest. While keeping your money physically with you, the actual value will be slowly slipping away. Sure, this is something that will only begin to affect you in the long-run, but it's still a good reason to use a bank.
No I did not.
Just to add to this, any normal insurance policy will have a limit on the amount of cash they'll pay for in any one claim. It's usually somewhere in the region of a week's wages at minimum wage.
The reason, of course, is that having vast amounts of cash in your home is asking for trouble (thus skewing the calculations that determine how much of a risk you are), and there's no sane reason why you would.
I highly recommend finding a credit union, I know I will never go back.
Honestly, I love my credit union. No fees at all, unlimited free ATM withdrawals from their ATM network, unlimited free debit card transactions, very competitive interest rates on savings accounts, and I can call up a branch and have a local teller on the line within 3 rings. Give all your local credit unions a good, hard look before starting to searchfor another bank.
Moving from M&T Bank (a shithole) to SEFCU (an awesome NY credit union) was the best financial decision I've made in a damn long time. There was a little while where I was getting more interest on my checking account than my girlfriend was getting on her savings account at some shitty bank.
Ha.
It was actually PC Financial that screwed me - I live in Canada too.
I DO have overdraft protection on my chequing account, and had used it and paid it off correctly as required by the contract I signed over 6 years ago. The bank (as they told me - I don't actually know what really transpired) had a "computer error" which caused my account to be frozen and sent to collections. All of the money that was owed to my landlord for rent was in that account and, as I had just ponyed up the money for the remainder of my tuition, I had no other money to cover the missing amount. This happened on the 1st of September, which was also a holiday and so of course the bank was closed and there was nobody to address the obvious emergency this "error" caused for me. My landlady is insane and completely unforgiving (which is a whole other issue, but still an obvious consideration).
The following day when they were open, I was told by the credit department that he could find no reason why my account had been sent to them and released it immediately, telling me I needed to speak to the regular department to get the account re-activated. I was then told by the bank that it would take 2-3 business days to re-activate my account so I could access my own money (although this turned out to be a complete and utter lie and I had the account fixed the same day, after of course waiting on hold for an excessively long time and missing paid time from my work).
One month's rent isn't that much to be screwed out of, I know - however the idea that anyone other than myself can take my money anytime they want, and then refuse to give it back to me even when there is no reason fot them to have it, is absolutely unacceptable to me. I have screwed myself over a good number of timesby being a dummy, and I've accepted the consequences with as much grace as I could - but that wasn't the case at all in this instance. It's not exactly the type of thing I'm really willing to give a "second chance" on. If I hadn't continued to harass every manager I could get on the phone, it's very likely that I would have been evicted for not being able to pay my rent.
I do appreciate the advice about joining a credit union as an alternative, though. I will definately look into that possibility. PC Financial / Amicus / CIBC, however, will never hear from me again, that's for sure.
I don't live in Canuckistan but I highly doubt that your landlord could have legally evicted you for being one day late on the rent.
I am an unhappy customer who will take my business elsewhere, which I'm perfectly entitled to do. I didn't mention half of the run-arounds and terribly rude customer service people I had to speak with, who essentially told me I was a deadbeat loser who they refused to help, even while I was attempting to be as calm, reasonable and patient as I could be in the situation (and I work in customer service, and know how to treat people nicely in order to have a better chance of getting what I need).
It might not seem like this happening would be a big deal to you in whatever happens to be your situation, but it certainly was for me, in mine.
The real issue here is that they didn't immediately either admit it was their fault, or correct the problem - because they were not available, and then I was given the run-around for almost 3 hours and treated like crap over what amounted to a lie, on top of the initial error.
If it bothers you, go to another bank. You can send the message that you were unhappy with this this way. Don't forget, though, that this was a honest mistake, not a bad practice, so you're bound to run into those pretty much anywhere.
Putting all your money in a safe in your home is probably one of the worst idea anyone ever had, anywhere. Seriously. Stick to your bank, or change for another service. There is no other alternative. Keeping the cash at home doesn't count as an alternative, only as a mistake.
Until recently, I kept all of my money in my house. When my saved cash got to be 15k, I realized it was time to set up a savings account. Now, from paycheck to paycheck, every amount of saved cash I have left over I throw into the savings account.
Being bank free has kept me so incredibly disciplined with my money. Going out I have a set amount of cash, for the weekend I can budget it with exactly what I need, and I never go over. Yes, you can do this with a checking account, but for me having the actual cash in hand makes the amount seem so much more real. Like every dollar counts.
I don't recommend this to anyone, it worked for me because I've been lucky, but there is SIGNIFICANT RISK involved. Be careful!
Yeah, see that's helpful. When we're talking about my finances, I'll be honest and say my bank account has never, since its instatement, seen more than $2,600 in it at any given time - and it only had that much to pay for University. That said, my credit is otherwise fine and I am currently paying off a car loan, which I qualified for easily.
I know most banks (here, at least) will waive service and transaction fees if one can maintain a balance of over $5,000, but I've never been able to do that due to having a crappy, low-paying job and supporting a non-working dependent for 4 years. I don't think I'd consider keeping more than that amount either on my person, or anywhere on the property where I live.
From the advice here though, it does seem as if a credit union would be the best answer. Pitseleh, I do see the value in living by a cash budget in order to encourage frugality and I think that would likely be very valuable for me at this time, however I also recognize that trying to keep my money safe by myself may not be very plausible.
If the answer is that I need to work mostly with cash, and have a savings account with a credit union for the extra, that really might be the best of both worlds, as it were.
Thanks for all of your input. I'll consider this "fixed" for now.
That's not quite true when it comes to the checking system.
What bank of America does should be illegal. They will charge you 35 bucks for every transaction over.