As a personal banker every single day I hear stories about the old banking system and (what I consider) ridiculous comments about the new banking system. I don’t remember a lot about the old banking system before I started working in a bank but I do remember going to the bank with my parents. I remember that while we waited in line for a bank teller to serve us my parents would manually fill out a deposit or withdrawal slip. I remember that their signature always had to be verified with an original signature card. Those were the days before we invented debit cards and personal identification numbers.
Here are some urban bank myths, money myths, as well as some common money mistakes:
3 Bank Myths from a Personal Banker
Our bank account is not a box in the back of the bank. When clients come to the bank we do not go into the back and deposit or withdraw money from your “account.” Many older clients believe that their account is a physical box in the back of the branch where we keep their individual money. Once I even had a client who asked for the exact $20 bill that she deposited the week before.
There is no person who works behind the ABMs. More often than you would think people come into our bank branch claiming that the man behind the bank machine stole their debit or credit card. When people leave their card in the bank machine it is automatically retracted for security purposes, there is no man who lives inside an ABM.
Bankers Have Magical Powers. We try to do our best for our clients however Bankers can’t work magic. We cannot magically approve a mortgage application if someone doesn’t qualify. Some clients ask us to “call in a favour” to someone with the authority to approve mortgages. I have heard that this is how banking was conducted many years ago but nowadays we have rules, regulations, and procedures that we must follow. Bankers can make suggestions on how clients can improve our personal financial situation, but it has to be collaboration between bankers and clients.
3 Money Myths from MSN Money
Renting is Throwing Away Money. I am a renter and I love it. Renting is not throwing away money because we receive security, luxury living, convenience, and no responsibility in return for our monthly rent.
You Get What You Pay For. In most cases I believe that this is true when it comes to quality and service. However, there is always an exception to the rule. More than once I have bought an expensive item and had it break or malfunction within a short period of time. I also once bought an extremely expensive pair of designer shoes and they were extremely uncomfortable.
Home Ownership is a Good Investment. I am sure that many people who were forced to give up their homes and who currently have negative equity in the value of their homes would disagree.
3 Money Mistakes (and Regrets) from Everyday People
Last week on Twitter we asked about your biggest financial mistakes or regrets. Here are some of the answers we received from our Twitter Friends.
I Don’t Have Enough Money to Invest. This is not always true because even $25 per month can add up to a lot of savings over time. We can make small changes in our daily spending and monthly budgets to free up some money to invest. We may always be paying off some form of debt so if we are waiting to be debt free before we save we may be waiting forever.
Carrying a Credit Card Balance will Improve Our Credit Score. This is not true because carrying a balance may actually negatively affect our credit score. When banks check our credit history they compare our credit limit with our current balance to determine if we are financially responsible. Using our credit card and making payments on time ensures a solid credit history. We should never carry a balance on our credit card that exceeds half of the credit limit.
Paying Cash for Everything. My bank manager once told me that “Cash Never Happened” when I declared a cash gift that a client gave me as a birthday present. Usually we have to declare all gifts from clients but my manager didn’t want to hear anything about me receiving cash because cash never happened. The reason is that there is no trace. If we pay with cash it’s as if the transaction didn’t exist. There is no proof of our payment and there is no financial trace. We aren’t establishing a good credit history if we pay cash for everything
Photo by Glenn Williams