Ask Ash Cash: Why Should We Use (or Trust) Banks?
AllHipHop.com’s resident Daily Word guru and all-around inspirational guy, Ash Cash, is back with his latest installment of “Ask Ash Cash.”
Great Day, my Great People!! Welcome to another addition of Ask Ash Cash, where we go in the streets and answer all of your finance and business questions. Remember you can send your video questions to Questions@AskAshCash.com or via Twitter (@IamAshCash use #AskAshCash).
Shawn from NYC has a great question about banks. With all the distrust that many people have with financial institutions, Shawn asks, "Why should we even use a bank?"
The answer is simple - it's safer, it's more convenient, and it saves you money.
All banks are FDIC Insured. What that means is that your money is protected from loss when it is in a bank. A lot of people joke about keeping their money under the mattress, but in doing so, you run the risk of theft or damage to your money from fire or any other natural disasters. FDIC which stands for Federal Deposit Insurance Corporation is an agency that protects your money up to $250,000 per account title. If your money is under the mattress and someone steals it or it is damaged, the chances of you getting it back are very slim.
A bank also helps you with structure around your budget. Not only is it a convenient way to manage your money, it also allows you to budget your money a little better and see where your money is going - if you use debit cards for most transactions. It also allows you the convenience of paying your bills from the comfort of your own home, rather than having to leave the house.
Lastly, it saves you money. Most people receive their paychecks via a check, so if you do not have a bank account you will be forced to go to a check cashing place to change your check. Most check cashing places, if not all, charge a percentage of your check to convert it into cash.
That is money that you are literally throwing away. Most banks offer free checking accounts, so having one will save you hundreds of dollars yearly from what you would have to pay a check casher.
Be careful with overdraft fees. Most people are afraid of banks because they never truly learn how to manage a checkbook so, in turn, they pay dearly by paying overdraft fees. The trick to avoiding them is to not rely only on what the system says you have available in your account. Make sure you are tracking your account manually as well.
Ash’Cash is a Business Consultant, Motivational Speaker, Financial Expert and the author of Mind Right, Money Right: 10 Laws of Financial Freedom. For more information, please visit his website, www.IamAshCash.com.