Managing Cash

A money map helps us to plan and manage our cash flow by the numbers, but how do we actually manage the flow of our cash?   Although it is becoming more common not to use cash itself, we still have to have a place for money coming in (from our jobs and other sources) and method for sending it out (to pay for living expenses, emergencies, savings, etc.).  We look to mainstream financial institutions (banks and credit unions) to help us.

However, did you know that in 2015,* over 23% of Pennsylvania households were unbanked or underbanked?  Unbanked means not having an account with an insured financial institution (i.e. bank or credit union); underbanked means having an account but yet still obtaining (nonbank) alternative financial services (check cashing, wire transmitters, payday loans, pawn shops, etc.).   There are various reasons that people don’t use banks or credit unions.  Distrust in the financial system, unable to access accounts because of outstanding banking fees, and illegal activities are some common reasons.  There are also some very good reasons to use banks and credit unions, such as cash on hand can be stolen or lost, alternative financial services are expensive, and deposits made are protected in the event that the institution is financially insolvent (fail or bankrupt).

Let’s take a closer look at these insured institutions, the products and services they offer, and finding the right fit for your needs.

Next Up:  Where-Financial Institutions

*2015 FDIC National Survey of Unbanked and Underbanked Households