Should You Be UnBanked?

To be “unbanked” means not having an account at a financial institution. In America today, millions are unbanked and the reasons are many. I will disclose to readers that, in general, I cannot support being unbanked for a lifetime; I know of no other legal and ethical way for the average “Joe” to build up assets without having someplace to store and grow cash. Also, my father was a banker and I have worked in the credit union segment of the financial services industry my whole career. Since a teen, I have never been unbanked. Should you ever be?

There may be times when consumers have so little, that it cheaper to pay check cashing stores than to maintain small accounts at institutions that charge to maintain small accounts. In spite of that truth, maybe you have seen a drive by your local government to reduce the number of unbanked consumers. The advertising probably uses the term “Bank On (the name of your city)”. Visit http://www.nlc.org/ASSETS/29887364F3FA47C7B929D5AB0DB50D18/Bank%20On%20Cities%20backgrounder.pdf to learn more. City leaders realize the general value and safety consumers receive when they use financial institutions.

Government and civic leaders also know that the unbanked pay very high rates to borrow money for short periods at payday lenders and title-loan companies. Rather than fight their political power by trying to legislate them out of business (after all, those are licensed business owners and voting citizens, too), the attempt is to educate consumers to better ways. There probably will always be those so-called “fringe” operations because there will always be consumers willing to pay more rather than to use a financial institution.

Are you unbanked, which means no credit union account, too? Have you thought about it recently? Take some time to shop around. Small credit union and local community banks may have accounts that you can afford that will allow you to begin growing cash balance. Let the institution pay you, even if only a little interest or dividend. At the least, there’s less cash stashed around your house to be stolen of to tempt you to splurge it. Overcoming the temptations and other money habits that don’t serve you well are among the reason for seeking a Financial Coach.”