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Banking and Financial Literacy

Hey, do you have a bank account? Do you have an idea of what your credit score is? Is that cash in your mattress even comfy to sleep on??



As many as 63 million Americans are unbanked/underbanked according to this Forbes article. The reasons often cited are concerns about fees, and privacy. Others have expressed a lack of trust in financial institutions, which of course I am sympathetic to - I remember 2008!

 

Some students avoid banks and use a variety of other services instead:


Venmo - An incredibly popular app, and it can be helpful for its ease of use to transfer money in a digital age. I don’t think that Venmo is useless, but it can lead to a great number of fees that may be otherwise avoidable at a bigger institution. Many banks and credit unions have free account transfers between accounts through Zelle anyhow!


Check Cashing places - You can do this anywhere, but places where you don’t bank may charge a fee. That 4$ fee or so may not seem like so much, but when it is consistently taken off the top of every paycheck you receive it all adds up! Check cashing places are also typically Payday Lending outlets, which are notoriously predatory and target people with credit scores that are too low to get a more legitimate loan.


Ugh, these guys again


The underbanked/unbanked situation does pose some genuine problems. Banks can help you build credit, provide financial services to their customers (like check cashing, and financial advice,) and assist them with getting loans for housing and cars. One of our community partners is Educator's Credit Union, and I would point any student towards working with them to start their banking journey.

 

As a credit union they are a customer-owned non-profit financial institution. This means they have fewer fees than banks do, and they give back to their community in the form of scholarships, and financial literacy courses. This is their website if you are interested in checking out more. 


You are going to school. You are making an investment in your future. Gaining financial literacy is going to help you achieve your goals after graduation when you land that dream job. Consider joining a credit union, and maybe check out 360 Degrees of Financial Literacy (a free organization where volunteer CPA’s answer questions and help guide good financial decisions.)


A final word about credit - I don’t think that credit scores are a good institution and also hey they are pretty racist, but they undeniably affect our ability to financially navigate our modern world. It behooves us all to have a better understanding of the systems that run the world we live in!

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