A penny saved...

I think I was 10 when my parents took my brother and I to the bank so we could start our very own savings accounts (not the secret ones they had for us...as far as we knew, we didn't have bank accounts yet.) I deposited a whole 12 dollars. We weren't raised on the whole chores/allowance system. Once in a while they gave us money to buy ourselves treats and such. And of course there were birthdays and Christmas, and with so many relatives all around us and with most of them not being very big on shopping for presents our take was pretty good.

You know how else I got my change when I was a little girl? Pay phones and newspaper boxes. Always check the coin slot for change left behind. Always. Oh yeah, and the shopping carts people are too lazy to return for their quarter. That's cashmoney, too. (Although now those carts are worth a dollar! Geez, kids have it great these days.) I didn't babysit until I was 13.

So yeah, we got bank accounts. We learned the drill, drop money at the bank, watch the numbers on your bankbook grow and grow. And there was that magical thing called interest, and it would drop more coin into your account, depending on how much you had hoarded already.

And then I actually got a job, and I actually started spending on the regular. And you know what I realized? Interest sucks. Interest on credit cards...even interest on bank accounts.

Picture this. You're a university student. Basically with school taking up most of your time you only have it within you to take on a part-time job...maybe a full-time job. Most likely, you'll end up working in the hospitality or retail industry. Ooooh, ka-ching ka-ching. (I'm being sarcastic here.) So, unless your parents are filthy rich and shower you with monetary "donations" frequently, you're living from paycheck to paycheck.

Savings? What's that?

The bank stores your money. It goes in, it flows out. Some accounts may have more flowing out than going in, but that's a whole other story. You're lucky if you have any cash left for your enjoyment at the end of the month or what have you. But you know what? The bank is taking away whatever money you have left in there, just nibbling away at it.

Most students and their banks have a great agreement where they pay no fees so long as they're still in school, or maybe they have reduced fees. This still has limits on how many transactions they can do, etc. etc. Just from what I can remember from my bank back in the day, say your bank fees are waived, but after 10 transactions in that month you're charged 50 cents for each additional transaction. And don't even get me started on that stupid 1.75 additional charge on top of your own bank's charges when you withdraw money from a different bank's ATM.

Alright, so you buy groceries once a week. That's 4 transactions. You pay your phone bill. You make payments on your 2 credit cards. You pay your internet using online banking. You write a check for your rent. You pay your cable. You pay your electric. Cell phone? Another payment. Get some new clothes. Maybe eat out once in a while. Even if you're watching your debit transactions, it's easy to go over 10. More likely you've got 12-15 at least.

Let's be optimistic and say you only went 3 transactions over your limit. At 50 cents each that's 1.50 you'll be losing from your account at the end of the month. Oops, and one of those transactions was at an "other" ATM. Ding you another 1.75. That's 3.25 on top of your "free service fee."

And what kind of interest did you earn, considering the rates these days, on what little you were able to save - if any? 2 measly dollars. You just lost a buck twenty-five by doing business with your local bank. It's been a pleasure.

So a dollar or two is really nothing for having the convenience and security of managing your money through the bank. But it still bothers me. They're taking your money so you can have the "privilege" of using your money. It's like giving someone your car, but everytime you need the car for a ride you have to hand that other person bus/cab fare. You're paying someone off so you can use your own car! Not to mention, since it's your car, you're the one paying for the insurance and the gas and repairs.

I've found that it doesn't feel better once you're out of school. Bank plan fees are 8.50 a month at the very least. Even if you've got a good hunk of cash sitting in your account...you'd need a LOT to earn enough interest to make that minimum 8.50 loss negligible.

Like I've said, interest sucks. It slows the bleeding on your account, but that's about it.