Last time, you were introduced to the 5 first steps of becoming financially literate. Here’s the link if you’d like to refresh (5 First Steps). The focus of this update is on Step #3: “Ditch Your Bank.”
Now, contrary to some people’s opinions, banks aren't evil businesses hell-bent on steal from you. Banks play a critical role within our economy, and life would be very different without them. Imagine a world where you kept your money literally under your mattress or invested in gold bars in your closet. Sorry, but no thanks! Banks offer a safe haven for you to store money with the guarantee that, when you would like to withdraw it, there is no need to worry whether your money still exists or not. And in today’s world, you don’t even need to worry if the bank itself goes bankrupt – the government guarantees all deposits up to $250k. It’s called deposit insurance, from the Federal Deposit Insurance Corporation, or FDIC.
You might have experienced bank anxiety before. There are a multitude of banks and every single one wants to do business with you. How would you ever choose which bank to use? Many factors can go into this decision. Do you want online account access? Do you want access to an ATM anywhere you go? Do you want a personal relationship? These questions are very important and can easily differentiate between banks. However, people often forget arguably the most important question: Do you want the best rate possible?
