One of the biggest misconceptions in personal banking that many people seem to fall prey to these days is that all banks offer basically the same account options. How false this idea actually is I can certainly tell you, and that’s exactly what I intend to do here.
As a young man, I had the good fortune of being supported by parents with great intentions and reasonably high incomes. In short, I wasn’t forced into early labor; in fact, working while in school was discouraged, despite my desire to make some money on the side. My parents urged a focus on education as my one and only job – the idea being that good grades would eventually land me a concrete, high paying job down the road, and then I could pay them back.
Unfortunately for all of us, we couldn’t foresee the economic turmoil that lay ahead, which would strike at the most inopportune time, just as I was graduating from college.
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The Start of It
Upon graduating, despite reasonable concern from my parents who were sincerely feeling the effects of the economic downshift, I decided to use my small life savings to do some traveling. My hope was that by taking a year or so to live cheaply and enjoy the world as a young man, I would gain some great life experiences and return to the working world just as things were starting to look up. How naive an idea that was is now laughable, but only because I managed to turn a resulting bad situation around and again find financial stability relatively painlessly.
About six months into my stint of traveling, my savings, which I had transferred over to my checking account, was dwindling faster than I could comprehend. I assumed that I’d been spending too much on food, drinks, and fun without really doing the math or sensibly budgeting. It didn’t add up though. By month seven, I had just enough to buy a plane ticket home, which I did immediately. And then I realized what had happened.
Bank Fees Take Their Toll
My existing accounts, both savings and checking, had huge maintenance fees attached to a failure to keep a minimum balance in both. I’d had no idea these fees even existed as I’d set the accounts up with my parents way back in high school. Somehow, they’d forgotten as well, and the result was a ridiculously huge amount of money being virtually thrown away to the bank over the course of six months. It was enough to cut my travel plans decidedly short, and force me to take out a hefty personal loan to cover my living expenses for the next 4 months before I finally found a job.
The Remedy – Researching New Banks
Aside from the loan, which I’ve just recently been able to pay off in full, I immediately dropped my old bank in disgust, and did a huge amount of research on various other options before deciding to go with an online bank, much thanks to discover.com/online-banking and other similarly helpful online banking sites that I used to compare interest rates and maintenance fee-free options. The number of vastly better options I quickly found literally disgusted me, such was my angst that I'd been so careless.
The Takeaway
Number one, never, ever, be naive enough to think that all banks and account options are created equal: they’re not. And number two, doing research on both your existing bank account and financial institutions and comparing them to other available options out there can save you a world of financial woe and heartache. The fact that I missed out on so much money and opportunity to continue an incredible traveling experience for such an unnecessary and easily-avoidable reason, has me kicking myself on a regular basis.
So do yourself a favor, and make sure you do the research before you find yourself doing the same.
Bank fees are no fun so make sure you know what your bank charges. Luckily I have USAA and ING Direct and they are both pretty good banks!