Everyone loves pay day. It’s a great feeling to see your hours of hard work result in a paycheck. But, there’s a chance you’re not pocketing as much of your earned money as you could be. It all boils down to your bank account, or, to be more specific, your lack of a bank account.
The Cost of Cash
US News reported, “According to the FDIC, 28.3% of U.S. households either don’t have bank accounts or rely on alternative channels for financial services, such as check-cashing.” Whether by choice or not, many people and households depend on major retailers, check-cashing stores, or the check-issuing banks to cash their paychecks to access their money. And, as US News pointed out, this service comes at a price, ranging from a flat-fee to a percentage of the check amount.
Specifically, that price, according to NBC News, which highlighted a new study from Tufts University, is about $200 billion a year. To narrow it down, that means “someone without a bank account pays an average of $3.66 more a month than someone with a bank account,” and is “four times more likely to pay fees to access their own money.”
The best way to avoid losing your hard-earned money is to use any electronic funds transfer (EFT) options your workplace offers. Most employers, offer some form of EFT, whether direct deposit or paycard, because it saves them the time and cost associated with paper checks. And, EFT can save you money too. NBC News reported that “getting paid electronically is often significantly cheaper than receiving a paper check” when there are fees for cashing a check without an account.
With so many people living paycheck to paycheck and struggling to save money for emergencies or retirement, it’s more important than ever to manage where your money is going. Find out if your banking method is costing you money, and if EFT could put a few dollars back in your pocket. You shouldn’t have to pay to get access to your money.
What have you found to be most effective for accessing your paycheck? Tell us about it in the comments section.
Movin’ On Up is brought to you by Express Employment Professionals.
written by: Ashlie Turley