[This post is from Ross H. Yednock, Director of the Asset Building Policy Project.]
Last month I went to southern Illinois to visit my grandmother on the family farm. It is a place I have been going to my entire life and I truly enjoy how it feels worlds removed from the life I live in the city of Lansing. This particular trip, I spent a lot of time driving my grandmother to and from the homestead into some of the neighboring small towns. While much has stayed the same in Olney and Fairfield over the years, I noticed on this visit that some of the old small shops I used to remember have been replaced by check cashers and payday lenders.
Sometimes convenience has a high price tag.
I only saw a few in each little town, a small number in comparison to Lansing or Detroit, but on a per capita basis I’m pretty sure that the 8,600 people of Olney and 5,400 of Fairfield have the same access to these high cost outlets as do us big city dwellers. This shouldn’t really come as a surprise, considering payday lenders grew faster than Starbucks over the last 15 years, but it is a troubling sign that consumption-based services are more prolific than savings.
As I mentioned, I’ve been going to the farm since I was a kid and as a result, I have many fond childhood memories. I learned a lot about finances and savings from my grandfather who, during retirement, accepted an uncompensated position as president of the Mt. Erie State Bank. On this particular visit, as I drove by the signs soliciting “CASH NOW – NO CREDIT CHECKS,” another childhood memory came to me: “Knowing is half the battle,” the catch phrase at the end of every G.I. Joe episode.
When it comes to personal finance and making sound decisions that enable you to build assets, knowing is half the battle.
Knowing the fees, charges and interest of a credit card, savings account, or checking account allows you to make the right decisions and save money toward retirement, college, or future emergencies.
Knowing that debit cards are directly linked to a checking or savings account, different from “pre-paid” debit cards which can cost $10, $20 or even $30 a month in fees, allows you to be a more savvy consumer and saver.
Knowing alternatives to using a check casher or payday lender allows you to save upwards of $500 or $1000 a year.
And knowing that you can get your credit report and Chexsystem report for free, from sites that do not advertise using catchy commercials or come with monthly and unnecessary “credit monitoring” fees, allows you take an active approach to your whole financial picture.
In coming blog posts, I will provide you with more tips and links to good information on personal finance and savings. In the meantime, remember, when it comes to becoming financially self-sufficient and secure, knowing is half the battle.
Every year, you are entitled to a free copy of your credit report from all three major credit reporting agencies. Get this free report.
Every year, you are entitled to a free copy of your report from ChexSystems, the company that financial institutions use to monitor consumers’ banking histories. Get this free report.
If you have questions or would like further information, please contact Asset Building Policy Project Director Ross H. Yednock.