Posts Tagged ‘credit’

How Much Cash do Americans Keep on Hand?

Thursday, March 5th, 2009

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What’s in your pocket?


Americans are losing faith in banks, period. That goes without saying and no explanation is needed. We all know this. The stock market is falling; banks are going down and receiving money just to keep themselves afloat. What is the average American doing? They are stashing their cash or carrying it with them! In the past year, since gas prices started skyrocketing, Americans have started looking twice at their bank accounts and getting nervous. Even then there was talk of there being a recession. People started withdrawing their money in a frenzy and selling their stocks, starting to stash it at home and carrying large amounts in their wallets. So how much money do Americans carry in their wallets, and how much money is stashed in American homes?

The amount of cash Americans carry on their person is directly affected by the area of the country they live in. People in New York and Los Angeles are going to carry way more money than someone who lives in a smaller town like Lorain, Ohio or El Paso, Texas. Since the cost of living is so different, the cash one carries for basic necessities would be much higher in New York City and way lower in Lorain, Ohio. The demographics on carrying money look like this:
The average purse or wallet in the United States contains about $104.

13% of Americans use a piggy bank.

28% of Americans have a coin jar.

15% if people in the U.S. have a large amount of cash hidden in their houses. Out of these people, half of them have it hidden and the other half hide it in plain sight.

1/3 of Americans keep a small amount of cash on hand for emergencies.

Finally, more than 50% of American’s don’t keep any cash at all in the house.

American’s carry cash so they don’t have to use credit cards, foregoing the interest usually incurred in that way. People carry cash because they don’t trust the banks and they haven’t been able to trust banks for at least a year or more. Some carry cash because that’s what they’ve always done and that’s what they were taught to do. Sure a lot of people go into a bank or through the drive through to cash their paychecks, in return getting their cash for no extra fees. What about those who don’t go to the bank and whose checks are automatically deposited? These people will usually hit up the ATM. It’s difficult if possible at all to not incur a fee when using the ATM so this way of obtaining your cash is costing you money. Is the tradeoff worth it?

Some might argue that we’re becoming a no cash society; using less cash and more and more debit and credit cards. I wonder if these people have taken a look at the economy lately because I think we may be going back to using as little plastic as possible.

How and Why to Start a Savings Account

Tuesday, March 3rd, 2009

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Put your money where the bank is.


Get that cash out from under your mattress and your bra is not a good hiding spot. I’ve seen some funny and innovative places that people have hidden their cash but none of those places is safer than the bank. Does your mattress doesn’t pay you to put money under it? Well a bank does.

First things first, you want to find the bank that’s for you. If you’re a walk-in type of person, you’ll want a bank that has a branch in your area. If you’re internet savvy, you might want a bank where you can control everything online. Interest rate is also a big factor you should take into consideration when choosing a bank. The higher the interest rate, the more money you will make putting your money in that bank. Some banks require or “suggest” you start your account with a certain amount. This could be anywhere from $500 to $5000 to much more. Some suggest you keep a certain minimum balance your account. These are all things you want to know before you start putting your money anywhere and before you sign anything!

Next you should decide if you’re saving towards a purpose (like a home or car) or just to save for your future. Something like this can make a difference to the banker when you go to open your account. Decide on an amount from every paycheck that will go into your account automatically. Try not to deviate from this amount. A general rule is 10% of the money you bring in. You could also set up a change jar and save up extra change and dollars in between paychecks. You’ll be AMAZED how much change adds up. Once you’ve chosen your bank and you’re familiar with that bank’s practices, policies and interest rate go ahead and sign up. If you do this online you may have to send in a form with your signature or some official documents.

Why in the world would you want to start a savings account to begin with? Isn’t a checking account enough? Isn’t my pocket enough? Well, to tell the truth, the easier the access you have to your money, the more likely you are to spend it. That’s just a simple fact. You need to have some backup money that you have access to but that isn’t the easiest, first route you go through to pay for something. You need a savings account to save for an emergency. In case your car breaks down or you have something unexpected comes up from across the country. You don’t want to have to pull out a credit card if you don’t have to. Save for retirement, save for college, save up for a vacation. No matter what it’s for, even just a rainy day, even just a dollar here and there, SAVE your money. You’ll thank me later.

How Technology Affects Our Money

Monday, December 22nd, 2008

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money technologyToday’s modern technology offers us a multitude of money management methods. We are constantly offered easier ways to pay at stores and while not as numerous, several options are available with regards to how we receive our money. We’ve always been able to pay with cash and checks as well as several forms of plastic including credit and debit cards. But today, new technologies are available that make paying even easier.

Imagine being able to pay for goods and services with just the touch of your finger! A company called “Pay By Touch” has developed a scanner that is currently being used in hundreds of supermarkets throughout the country. Customers do not have to carry credit cards, cash, or checks with them because they are conveniently able to go through the check-out line, scan their finger print, enter a phone number and select a bank account or credit card to pay for their groceries with. Customers do have to complete a short enrollment process prior to being able to utilize the program. Upon enrolling, their unique fingerprint is scanned, and an encryption program converts it into forty unique points and keeps the information confidential. When the customer touches the special scanner, the forty points are recognized and the transaction can take place easily and quickly.

Another new “contactless” technology called “Blink” makes it possible for customers to simply wave a card within four inches of a reader and within a second or two, receive a tone or a beep when their payment is complete. Nothing exchanges hands with anyone and no signatures or pin codes are necessary. The technology works by a Radio Frequency IDentification (RFID) tag inside of the card. The tag contains information about its owner including account numbers and balances so that it can charge the correct account, similar to the way a debit card works. The cards contain the same security levels as a regular credit or debit card and special coding is used to scramble the customer’s information so it cannot be stolen. This new technology makes paying faster and easier by an estimated 53% in comparison to swiping a credit card and 63% faster than paying with cash. It has become popular with convenience stores and quick-serve restaurants as these stores aim to get customers in and out as quickly as possible.

Another way technology is affecting how we handle our money is in the ways in which we are paid. Today, most employers offer at least two forms of payment: Check or Direct Deposit. Another new technology gives yet a new option for payrolling employees, this is especially important in a nation where 12 to 15 million individuals still don’t have a bank account. Typically, employees who do not have a bank account are forced to go to a supermarket or check-cashing store to receive their pay. These stores usually charge a convenience fee for their services. In the 1990s however, Payroll Cards were invented. Similar in looks to a regular debit or credit card, these cards allow employers to send electronic signals to the cards which represent the amount of money the employee is supposed to receive. The card then works as a “pre-paid debit card”. Utilizing these cards are cheaper that issuing paper checks. It is also safer than a paper check because they are less likely to be lost or stolen and are easily replaced in the event of either of these options. In addition, employers are able to save money because they don’t have to pay for postage or other expenses associated with mailing paper checks to their employees.