tsk tsk tsk don't "hoard" your cash

[iris lily]

This article

http://www.detroitnews.com/article/20140728/BIZ01/307280037

is another one to report that American's aren't out there spending money like crazy. The checking accounts of Americans have reached $4,000+. In time of low unemployment and economic strength, they only keep around $1,000 in their accounts.

This reminds me, that other website about FIRE has many international members. There is one guy posting who claims that the French do not spend money in crazy ways, debt is considered tacky, young people do not have credit cards, and the savings rate of the citizen population could bail out the government. I thought that was an interesting perspective.

[frugal-one]

Sounds like the way it should be here. I have to say my DS fits the french profile, thankfully.

[sweetana3]

The French generally have small homes/apts, do not have closets full to the brim with huge amounts of clothing and shoes, spend much less on transportation, have a fairly secure knowledge of their future as it relates to retirement and health insurance, etc. Love it.

[Aqua Blue]

Every Saturday in the summer when I garage sale, I become totally overwhelmed with all the stuff out there. And that is the extra stuff.

[bUU]

There are, of course, (at least) two schools of thought in this as in all things. The American economy is, regrettably, a consumption economy rather than a production economy. Lots of folks want to make the transition back to a production economy, but only under the condition that is accomplished without sacrifice on their part. Beyond that, it is reasonable to expect participants in an economy - any economy - to participate in a manner that is something close to a middle ground between unilateral self-interest and the economy's best interest. Therefore, given that there isn't substantive support for the sacrifices necessary to change what fuels our economy, there is sound basis for concern about hording of cash, specifically, because that's damaging to the economy. Whether through consumption or investment, the movement of money is critical. Yet here I sit, one of those people who are part of the problem, with too much cash on hand, but no idea where to invest it where I could have a reasonable expectation that it will still be there when I need to spend it to survive.

[ToomuchStuff]

I wish the article would also discuss the savings accounts. I'd rather have the money in a savings account and transfer it to checking as needed, then leave large sums in checking, after seeing so many id theft cases. But from some discussions I have had, most people don't seem to balance their checkbooks, they just go online to check.

[bUU]

It isn't clear to me how much "safer" money is in a savings account versus a checking account. The difference seems to be decreasing day by day.

[ToomuchStuff]

There are no paper checks on a savings account (neighbor can't print up ones with my info, and use them around town). Not linked to a debit card (unless you have some kind of overdraft protection). Your ID is on the computers now (911 regulations) when you go to the bank (not going to have neighbor get your money, example).
If you do online banking (I don't), I strongly recommend you use a bootable OS and ONLY due it from that (no history or autofill for someone to access your computer from). I would also recommend you have an email account just for your banking stuff (not shopping, signups, etc. etc). Your much less likely to get spam/phishing to it, if only you and the bank have it.
I can't say about ATM's, as I have never used one. Don't even have a card for one or know how. (old fashioned, mail bank statements still have postal regulations/protections that email doesn't)

[bUU]

As I said, it simply isn't as hard to commit fraud against a savings account as most folks think - simply isn't as hard as it once was. It has become a lot easier, almost as easy as committing similar fraud against checking accounts. There is no "safety" anymore.

[ToomuchStuff]

Examples?

[bUU]

Examples of fraud against checking accounts?

(The point is that if you do your basic research to prove your own assertion, you'll find the example of what I pointed out. I really don't have the time to do that research for you right now.)

Regardless: Here's an example... took less than five minutes to find. I'm sure you can find others if you are really truly interested:

Robert Chavez says his identity theft nightmare began back in April ... his identity had been stolen ... Chavez says he doesn’t know how thieves got his identity but he says they even managed to get access to his savings account. http://miami.cbslocal.com/2014/07/16/police-help-us-identify-suspected-identity-thief/

[thinkgreen]

Several years ago I wrote a check and didn't have enough in the checking account to cover it. My bank cashed the check and took the money from my saving account. They charged me $25 service fee to do this and did not consult me. It was my error that the checking account didn't have enough in it. But I was shocked that they would transfer the money without my approval and then charge me a service fee on top of it. It did make me worry about the safety of saving accounts. What if the check was written by an identity thief?

[ApatheticNoMore]

I was trying to figure out why checking accounts were more vulnerably anyway? I can't see any reasons they would be. Possibly because you've used them to pay bills? Ok never had a debit card or an ATM card etc. so that's about what I could figure.

[jp1]

There are, of course, (at least) two schools of thought in this as in all things. The American economy is, regrettably, a consumption economy rather than a production economy. Lots of folks want to make the transition back to a production economy, but only under the condition that is accomplished without sacrifice on their part. Beyond that, it is reasonable to expect participants in an economy - any economy - to participate in a manner that is something close to a middle ground between unilateral self-interest and the economy's best interest. Therefore, given that there isn't substantive support for the sacrifices necessary to change what fuels our economy, there is sound basis for concern about hording of cash, specifically, because that's damaging to the economy. Whether through consumption or investment, the movement of money is critical. Yet here I sit, one of those people who are part of the problem, with too much cash on hand, but no idea where to invest it where I could have a reasonable expectation that it will still be there when I need to spend it to survive.

Apparently you're not the only one with too much cash on hand and no good investments to be found. From what I've read stock buybacks by large corporations are at very high levels. If there was something worthwhile to invest in, like increased production facilities, they wouldn't be doing this, but would instead be putting their cash to more productive uses. Frankly it appears that our economy is contracting at the same time the stock market is going through the roof. Somehow that doesn't seem like a good long term proposition. I suspect it won't end well.

[ToomuchStuff]

Examples of fraud against checking accounts?

(The point is that if you do your basic research to prove your own assertion, you'll find the example of what I pointed out. I really don't have the time to do that research for you right now.)

Regardless: Here's an example... took less than five minutes to find. I'm sure you can find others if you are really truly interested:
http://miami.cbslocal.com/2014/07/16/police-help-us-identify-suspected-identity-thief/

Chekcing accounts, I know. (know too many examples) If your house is broken into, you need to go through ALL your checkbooks, as it is common to pull some checks, randomly out of checkbooks and use them where id's aren't checked.
Getting "preapproved" from having id stolen, again EZ and I k now too well about it. Savings accounts, without having what I mentioned, I still would like to know how. The story you linked doesnt' list how it was hit. The only examples I know of, have to due with electronic access, either online banking, skimmers, etc. (none of which I do)


I was trying to figure out why checking accounts were more vulnerably anyway? I can't see any reasons they would be. Possibly because you've used them to pay bills? Ok never had a debit card or an ATM card etc. so that's about what I could figure. Debit cards, paper checks (either bleaching or other techniques), just from general use (do you use checking or savings more?).

[bae]

I was trying to figure out why checking accounts were more vulnerably anyway?

Well, your checks have your name, address, account number, bank branch, and bank routing number on them, so there's that...

[bUU]

Not knowing how it is done doesn't mean the risk doesn't exist. The point is that savings accounts are not "safe". There are paths leading to loss whenever we own anything - even gold bars. The difference in risk between various types of accounts is trending toward practically insignificant due to "innovations" in the business of fraud.

[ToomuchStuff]

Did I ever say risk didn't exist? People have been kidnapped at gunpoint to get money from people that would be in savings. My point is there is still LESS risk where your not exposing yourself and you move the risk (as it is moved anyway, for example if the bank/credit union itself, was hacked). I disagree with insignificant part, because like home burgleries, theives like easy targets.

[bUU]

Did I ever say risk didn't exist?Did I say that the risk was exactly the same? No. I said that it isn't clear to me how much "safer" money is in a savings account versus a checking account. The difference seems to be decreasing day by day. That was my point. I see no point in any of your replies indicating why you posted any objection to what I wrote. :shrug:

[ToomuchStuff]

Sounds like we are reading into the reply's then. Sorry. (had similar discussions in person with some who have had problems, and then went back to old habits)

[jp1]

In reading this thread it looks like there are a lot of people here who write way more checks than I do. I finally had to buy more checks for the first time in at least 10 years (my old checks had the address of my apartment that I moved out of just over 10 years ago.) At one check per month (rent) the current set will last me for pretty much the rest of my life. I pay all my bills online because it's easier, faster, cheaper (the checks I just bought cost about $.30 each. Online billpay is entirely free.). I use a seperate browser only for banking, and an email address that no one except my banks, credit cards and etrade have and I use a password vault so that I have different, random, long passwords for each account. Could I do more to protect myself from theft/identity theft? Sure. Am I terribly concerned that disaster is around the corner? No.

An idea that a coworker suggested is to keep a modest amount of money (maybe $500ish depending on one's lifestyle and spending habits) in a savings account at a different bank from where you store your wealth/checking account/etc. Use a debit card associated with the low balance account as your main plastic spending card. That way at the very worst a thief will have access to maybe $500. Yes that would suck if it were lost, but it wouldn't be life destroying. And it wouldn't wreak havoc on your life when you need to pay the mortgage and other bills.