It’s a rainy day here in Cameron and that brought me to a topic that I hit my customers with early on, where is your rainy-day fund? Growing up in rural Missouri and working at local banks has shown me that many people have a very weird loyalty towards their hometown bank. Why, what do they do for you? Sure, most local banks “give back” to their communities, but have you looked at how they’re doing that? (Hint: it comes from you.) Banks are businesses and I’ve seen them take advantage of customers in the most ruthless of ways. And yes, I’m talking about your local hometown community bank. Their number one priority is their shareholders, not to their customers or their communities.
Even while working as a loan officer, I can remember times where customers would brag about their 30+ year old checking account and getting a loan there just because that’s where they have always banked. That told me that you just like to give money away. When you don’t shop around for other services and stay with what you’ve always done, you’re likely being taken advantage of. I understand the sentiment of wanting to keep your money local, but do you realize the sacrifice you’re making by doing that? It’s a direct impact on your personal finances. You’re basically giving someone else your hard-earned money and thanking them for taking it.
Let’s dig into it a little more and look at your own rainy-day fund, or as Dave calls it your Emergency fund. Likely it’s sitting in a savings account at your local bank. A quick check this morning showed that of the 3 “local, community banks” all had a max savings account rate of 0.80%. Right now, that is crazy! High Yield Savings Accounts (HYSA) are awesome these days and online banks have grown in popularity over the years.
I’ve heard a lot of feedback from people questioning the ease of getting your money from these places when you need it. The speed of online transfers has become insanely fast, you can normally get access to it within 24 hours. With several online banks offering greater than 4% for a HYSA you seriously need to consider doing what’s best for you personally, and not what’s best for a local bank.
Opening accounts and updating your account information could be a pressure point that you’re not willing to take. Sure, it takes time and a little bit of effort to do so, but it’s more than worth it to spend some time looking at these things. Loyalty to your bank only benefits them. Back to last week’s post, what is a little time worth to you? When I was a loan officer, the most loyal customers often paid the HIGHEST interest on loans, because the bank knows that you aren’t going anywhere.
Anyone out there under 40? How often in your jobs have you come across something that can be improved upon only to hear pushback of “well that’s the way we’ve always done it”? Change is tough, change can take time, but change can absolutely be worth it in the long run. It sucks the life out of you to hear it at work, but then you’ll turn it around and tell me that when I tell you to shop. Here’s your wake up call to take action with your finances.
Get in the habit of reviewing your accounts and shopping around to see what else is out there. Look out for number one because no one else out there is. Do what’s best for you and your family; I want to see YOU get rich, not the banks.
If you’re like many others out there that know you need to do this, but just want someone to push you to do it, give me a call or schedule an appointment. That is exactly what my Hourly Consulting option is perfect for. And for Pete’s sake don’t wait until the next rainy day to do this.
*Disclaimer: These were interest rates checked on 5/2/24. Please do your own research when checking rates as they will likely change.