The Sad Old Man
Welcome back!
My wife and I were on our way to our second night job last night and saw a sight that really upset us.
As we stopped to get gas on a fairly busy highway, we saw a slow moving old man walking his bike along the highway. After we stopped and filled up we saw him approach the gas station, park his bike and proceed to go through all the garbage cans, looking for aluminum cans.
While the sight was rather sad, there is a lesson to be learned. This man was very old and probably grew up in a generation that was used to austerity. It’s sad that an old man has to dig through garbage to eat but this blog is not about social inequality.
What’s remarkable is that this man has nothing and instead of sitting around, letting his world collapse around him, he’s doing what he was raised to do. Earn money any way he could. Most people would not be willing to do what he was doing, they’d rather starve.
I think the man was very brave.
Besides, with commodity prices the way they are, those aluminum cans are actually worth the trouble. Think twice before tossing them out. Heck, don’t even pay someone to take them away from your curb on recycling day.
Take them to a recycler yourself and you’ll get some cash. You can also do what my wife and I have been known to do, gather cans up over many months and then drive up to Michigan to go eat out at Redamak’s. We don’t go to Michigan to cash the cans, we go to eat and use the cans to help pay for it.
The Virtues of Credit Unions
Tough times call for new ways of banking.
People are starting to realize that banks aren’t on their side. Banks are mostly responsilbe for the mess we’re in now. They created the conditions for this mess to occur and watched idly by, while greed on an unprecented scale wreaked havoc on the financial foundations of our society.
It’s been made very clear that banks do not have our best interest in heart. So, it’s time to cut them out of the equation.
I’m not suggesting we return to storing our savings in the matress. We need a checking account somewhere to conduct business in this modern age.
The trick is to not particpate in the banking system while continueing to have banking services. Our economy is too electronic based to go completely without banking services. Our stance on being unbanked is that you shouldn’t do it, it will only cost you more money. Paycheck cashing places are a ripoff, as are the fees they charge to pay bills.
So, where does that leave us? It’s time for Credit Unions to become popular again.
The Return of Local Banking
Some would argue the very idea of a credit union is un-American. I disagree. One of the best movies ever made is “It’s a Wonderful Life.” Good ‘ol George Bailey ended up running the local savings and loan, which was essentially a credit union. The concept is simple, you put your savings in the bank and the bank makes loans with it. It makes loans to be people based on actually knowing them, it fosters a community of ownership.
The problem in our society is that we have removed personal banking from the banking equation. Banks don’t care about customers or customer services. You’re just a number and an equation of risk to them. They don’t give out loans based on knowing you personally. They give you loans based on a arbitrary and unfair FICO score system that you have very little say over (yes, you have a say in how you use credit but not in how score is calculated).
So, just what is a credit union?
Simply put it’s a banking organization founded by a group of people banded together. Every member owns one controlling share. Every memeber gets a say in how the credit union is run. Every member puts their money in, and by pooling their resources, the credit union can make loans to people and provide standard banking services such as checking accounts (they call them draft accounts), savings accounts, lines of credit, CD’s, investments and insurance. These services are not open to the wider public, they are only available to members.
By nature, credit unions are not-for-profit ventures. They exist solely for the benefit of their members, so you can bet that the customer service will be excellent. After all, you’re an owner. As a result, fees are either non-existent or relatively low compared to commercial banks. The interest rates they charge are also generally lower as well because profit it not the reason they loan money.
Anti – Credit Union Propoganda
There’s a lot of anti-credit union propaganda out there; mostly disseminated by banks who don’t like the competition. Credit Unions have also been traditionally closed to most segments of society, membership is usualy limited to a specific group of people. That’s changing. Most credit unions are now open to anyone who lives in a specific town or county. You’re money is as safe in a credit union as it is in a bank, they are not FDIC insured, but they have their own deposit insurance backed up by the Federal Government.
Another criticism about credit unions is that they don’t offer as great a return for you money. That’s starting to change. Many credit unions have competitive interest rates on their investment products. There are also plenty of online, direct savings banks that are great places to save money and have excellent rates. These accounts can co-exist peacefully in your portfolio with a credit union.
Conclusion
The overall goal of this blog is to teach people how to save money, go with less and make wise financial decisions to get through these tough times.
It’s time to put the local back into your banking. Establish a relationship with your credit union. I doubt you’ll regret it. And what of the banks? They’re like a whore spouse who takes you to the cleaners after divorcing you, then begs to have you back after you’ve met someone else.
One thing I encourage everyone to do is research for themselves. Here are some helpful resources that I found:
Credit Union Resources
Wikipedia Entry on Credit Unions
Locate a Local Credit Union
Federal Regulating Body – You can see the latest financial reports for your local credit unions and see their fiscal health
