Anyone NOT have a checking account? - Mothering Forums

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#1 of 20 Old 01-23-2010, 06:43 PM - Thread Starter
 
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Money has been extremely tight, and to make a long story short, I'd say at least 10% of our income went to bank fees this past year. And with little money to begin with, this has proven disasterous for us.

I want to be done with my checking account.

Here's my (very newly born) plan:
- cash my husbands paper checks weekly
- pay monthly bills with secured credit card
- pay credit card bill (and rent) with a money order
- everything else use cash, which is my goal anyway

Can you see any holes in this plan? Or do you think it is doable, without too much trouble?

I'd especially love to hear from other mommas that don't use a checking account.

Thanks!
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#2 of 20 Old 01-23-2010, 06:46 PM
 
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Do you have a place to cash the check without a fee?
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#3 of 20 Old 01-23-2010, 07:09 PM
 
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I think it's doable. We did this for a while with wal-mart's money card (there are other pre-paid visa cards). We were between bank accounts, and wanted to continue to pay some bills online. The good thing is they won't let you go over - if you don't have the money, you don't have it. DH cashed his paper checks and had them loaded onto the card, but they also offered a direct deposit. Everything else we paid for with cash/money orders.

I think it will work out for you guys, though you may eventually want to go back to a bank (we did, and are happy). I think it's worth the check cashing fees to not have overdraft fees.

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#4 of 20 Old 01-23-2010, 09:10 PM
 
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Can you pay bills with a credit card? I wasn't aware that was possible. I think I looked into it a while back to see if I could really rake in the miles and it was not possible for most things. I guess you could call each place and check.

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#5 of 20 Old 01-23-2010, 09:40 PM
 
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Not having a checking account would make me feel ridiculously unsafe.

I would get rid of the ATM card and withdraw cash once a week, still paying rent and bills with your checks. Adding a credit card to the mix, even with the best of intentions, is foolish. As Dave Ramsey "kind of" says... "If you play with snakes..."

If your bank charges low balance fees, you need to switch banks or at least switch accounts at your current bank.

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#6 of 20 Old 01-23-2010, 10:07 PM
 
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I agree with the get rid of the ATM card. No credit card either. I pay the bills with just a couple of checks a month. I take out cash for day to day living once a month. When it's gone...it's gone. I do so much better this way. I spend WAY less money. Good luck.

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#7 of 20 Old 01-24-2010, 12:10 AM
 
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Quote:
Originally Posted by MonkeyPrincess View Post
Money has been extremely tight, and to make a long story short, I'd say at least 10% of our income went to bank fees this past year. And with little money to begin with, this has proven disasterous for us.

I want to be done with my checking account.

Here's my (very newly born) plan:
- cash my husbands paper checks weekly
- pay monthly bills with secured credit card
- pay credit card bill (and rent) with a money order
- everything else use cash, which is my goal anyway

Can you see any holes in this plan? Or do you think it is doable, without too much trouble?

I'd especially love to hear from other mommas that don't use a checking account.

Thanks!
Are there fees to cash DH paycheck
Are there fees to pay monthly bills with CC
Are there fees to get MO to pay bills

Those fees alone can add up, along with the transportation to the checkcashing/MO store, and stamps to mail everything off. I much prefer direct deposit and bill pay.

If you want to live w/o a bank account, why are you paying bills w. the CC, why not just get MO's to pay everything and send those out? You seem to be adding an extra step or 2 with the CC then having to pay the CC.

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#8 of 20 Old 01-24-2010, 11:01 AM
 
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We've done this for about a year now. A pp mentioned it would make her feel unsafe, but our checking acct was making us feel unsafe. After a couple of clerical errors that costs us hundreds we decided to close the account.

Will you still have a savings account?

Dh cashes his check at the bank that the company he works for does banking with, so there are no fees.

We pay most of our bills with cash. Transportation to go pay them isn't an issue, they aren't far and aren't out of our way. What we can't pay for with cash we get a money order or a secured credit card.

Actually, by secured credit card I mean one of those prepaid visa check cards you can get at most banks and stores.

It's helped us enormously. Dh and I are, embarrassingly, not good with the abstract financial stuff - an amt. written on paper. It was causing more heartache than it should so we decided to simplify.

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#9 of 20 Old 01-24-2010, 11:10 AM
 
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I wonder if you will simply duplicate the problem that you're having with a debit card (overspending???) with your secured credit card...wouldn't it be accepted anywhere a debit card would be accepted? Why not do as a PP suggested and keep the bank account and do away w/the plastic? (ATM card)

Katherine mother to DS 8/03 and DD1 9/06 and DD2 6/10
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#10 of 20 Old 01-24-2010, 11:35 AM
 
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That sounds expensive to me too. Check cashing fees (unless you keep a savings account), credit card fees, money order fees, will all add up.

If I was in that position, I'd probably simplify by doing what others suggest, and keeping the account, taking the check there and depositing what was needed for bills, savings, and rent/mortgage, then taking out the rest to live on. When the cash is gone, it's gone. I'd also recommend checking out something like DR's envelope system or Gail Vaz-Oxlade's jars so that the cash doesn't just run though your fingers like sand.

Can you go online with your checking account to pay bills? I do that so the money is gone almost as soon as it's in the account.
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#11 of 20 Old 01-24-2010, 04:41 PM
 
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Quote:
Originally Posted by MonkeyPrincess View Post
Can you see any holes in this plan? Or do you think it is doable, without too much trouble?
This is my concern with your plan---- why are you getting the fees now? If it is because you are overdrafting, how will you suddenly be able to pay your bills on time WITHOUT having the option of overdrafting? It it is random bank fees--- go to a credit union. To me it sounds like you need to work on budgeting and timing of bills. If you are loosing 10% of your income to bank fees, you should have a good sized cushion to work with.

Good luck!

 

 

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#12 of 20 Old 01-24-2010, 04:54 PM
 
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I would use the checking account, but set a budget with the cash you pull out and maybe set up the envelope system.
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#13 of 20 Old 01-24-2010, 05:06 PM
 
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I'm from Canada so I'm not sure if this is the same where you are but here there are several banks that have savings accounts that don't cost anything. And I don't mean the kind that needs a minimum balance to stay free. You get a limited amount of transactions a month with this kind of account but if you think you go get by with NO transactions you can probably manage the 10 or so that they offer. Also, you can set up a chequing account that is pay per transaction. I think each transaction is 1 50 cents or so depending on what it is but it might be a lot cheaper than what you what you are currently doing. Oh a third option would be to put all of your money on a credit card and use it to pay your bills, buy groceries etc. If it's a free card then the only time you would need to pay a fee is if you withdrew cash which hopefully you wouldn't need to do much or at all.

Other than that I do think that what you are talking about is possible. It just might not be that comfortable security wise. And personally I'm much better at budgeting when I can see my money online vs. having cash in hand.

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#14 of 20 Old 01-24-2010, 05:27 PM
 
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We were without a bank account for about a year and it was a huge pain. We had to pay fees to cash checks, fees for money orders, money for stamps and envelopes. I am so happy now that we have a bank and we can pay bills online or with a debit card.
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#15 of 20 Old 01-25-2010, 05:41 AM
 
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Just curious, how much fees is your bank charging your guys? Do you have online banking? It really shouldn't be more than a few dollars a month to pay bills online.

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#16 of 20 Old 01-25-2010, 11:11 AM - Thread Starter
 
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I wasn't totally clear in my op, sorry.

I am more afraid of the bank fees ($35 an overdraft, they don't post that something is coming through and send it back. It then tries to come through again, but because the $35 fee came out, the original amount makes it not enough and I get another $35 fee, plus I still have the original amount AND the fees associated with that AND anything else that was trying to come through). I literally paid thousands of dollars in bank fees this year, and that just adds to it - money I could've used to buy food, gas, pay bills is sucked up in bank fees. The fees to pay bills online are much less daunting to me, than the unknown amounts that I have paid when things snowballed completely out of control...

I do know how to budget and have had no problems with checking accts for the last 13 years, until recently, when our situation got really bad, really fast.

We, thankfully, are digging our way out...albeit, v e r y s l o w l y. I just thought taking away the opportunity for bank fees would be an extra safety net. I get so angry at the way the system is set up, and feel so helpless, I don't want to deal with any of them - banks, utility companies, etc.

The reason I thought a secured card would be helpful was because we have no credit, other than our van payment, which has been behind for a while (although up to date now), and is only in my husbands name. I want to get a secured card to build my own credit, as we are working out a situation with our current landland to turn our lease into a rent to own within the next 2-3 years. I wanted to build some credit.

Anyway...

Thanks for posting, mommas.
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#17 of 20 Old 01-25-2010, 12:02 PM
 
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I haven't been in your situation but years ago (like 15 or so) I was unbanked and honestly its not something I would willingly choose. Fees can add up quite fast to cash your paychecks. Even back then I was spending close to $20 a month on check cashing fees, plus the costs of money orders. Also you lose a certain level of security using money orders, say you lose one you generally don't have the same options you would have if say you lost a check. In the end and data is out there to support this it costs a lot more to not use a bank and most credit cards that you are talking about getting would have really high interest rates.

Personally I would clear up my accounts and switch to a credit union and don't get a debit/atm card. It would be similiar to being without a bank but you would not have to pay to cash checks or to pay your bills.

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#18 of 20 Old 01-25-2010, 12:20 PM
 
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Just wondering, what is the envelope system?

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#19 of 20 Old 01-25-2010, 12:21 PM
 
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When we moved about 4 years ago, we didn't have a checking account (we did have a savings, so we could cash DH's pay checks).

We had to buy stamps and money orders at the P.O. to pay bills. This was time consuming, annoying, and expensive.

We stayed with this system for awhile, though, and shopped around to find a good financial institution for our situation.

We found one: a credit union with no minimums and low fees. Well, you have to have a savings account to have a checking account, and the savings account has to have $5 in it, but that's the only minimum.

We don't have a checkbook, and, up until very recently, we didn't have a debit card. (We have one now, and it lives in the desk drawer as it is only used to make online purchases.)

We have online bill pay through our credit union, which ostensibly costs $3/mo, but we have never been charged anything. I actually called because I wanted to pay the entire $36 at once so that there was no chance my account would run into the red (in case it was at zero when they deducted the $3) but apparently we became members under a promotion so we've never been charged.

If I were you, I would get a checking account with online bill pay, no debit card, no checks. Keep the secured credit card to make online purchases. Do everything else with cash.

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#20 of 20 Old 01-26-2010, 03:37 AM
 
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I see what you are talking about and those fees are horrible. I've had that happen a couple times. I would keep the bank account (or a credit union is a good idea) and then remove all accounts that have permission to automatically withdraw from your account. You can also put a stop payment on any pending withdrawals. this usually costs about $10 (here) but could save you in the long run if you are forced to juggle your money a little. Tell everyone that you will pay them yourself in person by cash or use debit/interac. Hopefully that helps. I really hope you can get out of this situation soon. I know it isn't easy.

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