By: Valentina Harris
Having a financial institution where you keep your money is very important in this day and age. Consumers who do not have a bank end up paying an extra one to four percent just to cash their checks. Having a home for your money is essential and here’s why.
You Can Save Money
If you are like many, anytime you have to pay someone for your own money, it hurts. On average consumers are paying approximately $9 to cash a $500 check. That’s just like giving away your lunch money, just to get paid for the money you worked for.
You Can Get Access to Your Money Sooner
If you have a checking or savings account to receive direct deposits, you will typically get your money 24 – 48 hours faster than paper checks, and that is not including the time it may take to receive the check in the mail. Late payments are a huge blow to your credit score so receiving your money in a timely manner allows you to pay your bills accordingly.
You Can Practice Good Record-keeping
If your goal is build wealth, then more than likely you will eventually need a personal, auto or home loan. You will want to have a trusted financial establishment that knows you and you are comfortable with long before you ever need them. Having an established relationship with a financial institution really helps you in the approval process depending upon the institution.
Now I can go on and on about more reasons why you should at least have a checking and savings account, but one of the biggest reasons is to help keep good records. Again, if you ever need a loan you will be glad that you have proof of income and expenses in an organized, verifiable manner.
You Can Ditch Your Bank
Now that I told you why banking is so important, I am going to tell you why I think you should ditch your bank. Unless you are in a position where you need interstate access to your financial accounts, such as you travel between two states, a credit union can usually provide for all of your needs.
You Can Have Access to Your Funds
And even then. Most credit unions have partnered with many major drugstore retailers such as Walgreens and CVS to offer access to their ATMs for free. If you find a credit union that has access like that, you have access to more ATMs for free than all of the major banks combined. As we all know, these major drugstores are on almost every corner. However, if your banking needs require you to make a lot in-person transactions and there is not a credit union in your area, you may have to use your local bank.
The Break Down Of A Not-for-Profit Financial Cooperative vs. For-Profit Corporation
My reason for encouraging you to work with a credit union is easy to understand. Banks are for-profit corporations that are successful when their customers have to pay higher fees and interest rates. Credit Unions are actually non-profit, money making organizations whose success transfers to better rates and lower fees for its members.
Invest In A Field of Membership
Credit unions usually provide all of the same financial services that a bank does. Credit Unions are cooperatives, made up of members who all share something in common. The thing that they share in common is called a “Field of Membership.” Sharing a “Field of Membership” or being a relative of someone who does, is all you need to meet the criteria to become a member.
Seek Low Minimum Deposits
You are often required to have a savings account with a minimum deposit in the account as well. My current credit union requires me to keep $5 in my savings accounts at all time. My first credit union required just a quarter.
For Us, By Us
These cooperatives are run by a volunteer board comprised of members, elected by members. Could you imagine being able to have a say in who runs Wells Fargo? Well when you are a member of a credit union, you could actually vote and/or run for the officials who run the credit union.
The sole purpose of the credit union is to improve the financial well-being of its members. And the sole purpose of the Black Girl Wisdom blog is to improve your overall well-being. Be sure to subscribe!
Valentina Harris, is the co-founder and Director of Marketing for the paralegal firm Paralegal Power Co. and its subsidiary OnMyComeUp.com, a credit repair and debt settlement organization. A proud mother and social justice advocate, Valentina has been an active paralegal for the past 13 years. Over the years she has helped thousands of people in a number of areas of law; however, she has always had a passion for Consumer Rights.