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Time Perspective

Once-Bitten, Twice Shy: How Past-Negative People Should Handle Their Money

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Once upon a time, a generation of people grew up to be past-negative individuals. They had a great distrust of the banks, were wary of investing in the stock market and embraced frugal mentalities – their mainstream music even glorified thrift shopping.

We’re not talking about Depression era babies; we’re addressing the millennials who experienced the Great Recession.

The many millennials graduated college and entered a job market, which either fell out from underneath them or made it incredibly difficult to find a job. A substantial percent of the generation struggled with student loan debt; others saw their parents or grandparents lose their retirement funds in the stock market. It’s understandable why the generation tends to be once-bitten, twice shy about money. They are hung up on negative memories and are overly cautious towards the future.

Typically, past-negative people are those who live a life of regret and focus on their unhappy memories instead of enjoying the present. While not all Millennials are past-negative individuals, a frightening portion of the generation are past negative about their finances and prefer to “invest” in cash.

Frugality and thrift shopping may be great financial habits, but an overly cautious approach to money can cause issues in the future.

The Financial Implications of Being Past Negative

Historically, being a past-negative person has been viewed as strictly an unfortunate scenario for a person’s mental wellbeing, but it can actually play a positive role in their financial health.

People who are past negative (or once bitten, twice shy) are less likely to fall into financial trouble because of their overly cautious nature. They evaluate consequences and financially plan for the future, which means they likely always pay their bills on time, may have a retirement account and likely have savings, an emergency fund and budget their spending.

The downside of being once bitten, twice shy is the tendency towards being overly cautious with money.

Past-negative people who have debt are likely managing it well by making on-time payments, but they should still shop it around and look for the best rate possible.

Past-negative people are less likely to succumb to financial issues like bankruptcy, foreclosures or massive debt – but they’re more likely to miss out on returns from investing. The desire to stick with the status-quo and stay within their comfort zone, often makes past-negative people hesitant to invest in the stock market or take any risks with their money. They’d prefer to just tuck money away in a savings account instead of taking a chance on losing money in the stock market.

Sure, this mentality will likely help avoid financial ruin, but it also means missing out on return on investments and making money in the stock market. Money just stored away in a savings account, especially earning only 0.01% interest, won’t be beating inflation. Their money would actually be losing purchasing power.

Year-to-year there may be some dips in the market, but a diversified portfolio will be much better in the long-run than money just stored in a low-interest savings account.

Practical Tips to Harness your Past-Negative Feelings:

1. Switch to save: If you’re stuck in debt, then don’t expect an existing lender to help. You can reach out and shop around elsewhere to find a better deal.

2. Make new memories: It’s important for your mental health (and financial) to enjoy new positive experiences, like a new restaurant, quick trip or a new class. Experiences should trump material possessions.

3. Smooth(er) sailing ahead: Set aside some time to think about investing, and not just throwing money in a savings account. Your employer’s retirement plan probably has someone you can speak to for advice.

4. If you’re going to tuck away money into savings, at least find an account that pays more than 0.01% in interest.

Find out your time perspective by taking our simple quiz.

Got questions? Get in touch via TwitterFacebook or email info@magnifymoney.com.

 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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College Students and Recent Grads

Switching from a Student to a Non-Student Bank Account

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Switching from a Student to a Non-Student Bank Account

This is our first post from our new contributor Kelly Harry. Kelly is joining us from Brooklyn College where she’s majoring in journalism and finance. 

When you’ve completed college, it is in your best interest to change your student bank account into a non-student account. Why you ask? For one, your bank will do it for you, whether you notice or not. And second: loyalty costs.

As a college student, you’re seen as a hot commodity to banks. To entice you they’ll offer exclusive deals, such as free banking during your college years. However, when you graduate, your account will graduate with you, and all those wonderful perks and savings will unfortunately come to an abrupt end.

Once you graduate to a non-student bank account, most banks have minimum deposit amounts, monthly fees (if you fall below that minimum) and expensive overdraft structures. Even worse, you can only use ATMs of that bank, and can pay pesky fees if you use an out-of-network ATM. While they’re trying to sneak money out of your account in fees, they pay almost nothing on your deposits. The typical interest rate on savings accounts is 0.01% at traditional and community banks. So why waste your money on unnecessary fees when you can switch banks and protect your cash?

I know what you’re thinking, and believe it or not, switching isn’t as complex as it seems. Post-graduation life is full of change, and miscellaneous inquiries anyway, so while you’re hunting for that new job, why not shop around for the best “non-student” banking deal.

Here are a few tips on how to avoid costly banking fees:

Never pay a monthly fee

When you first graduate from college, you may be living from paycheck to paycheck, with minimal money in your account. Monthly fees for bank accounts can add up quickly. You should find a bank that has no minimum deposit amount and no monthly fee. A minimum deposit is a set amount of money you must keep in checking or else the bank will slap you with a monthly charge. For Bank of America’s Core Checking Account, you need to either have a qualifying direct deposit of $250 each month or a daily minimum of $1500 in your account. Otherwise, BofA will charge you a maintenance fee of $12. These fees are waived for students, but college grads get the unhappy gift of a “real-world” account. Beware, if you’re searching for a job and don’t have a direct deposit going into your account each month (or a spare $1500 sitting in there each day) you’re going to get charged a monthly fee.

Never pay an overdraft fee

Big banks can charge you a fee per incident when you go overdraft. These fees can high as being $35, per overdraft charge. Those fees can add up quickly, and when you have a low balance in your checking account, it is easy to make a mistake.  You may have signed up for overdraft protection, but many of the big banks still charge a fee to transfer money from your savings account to cover the cost of overdraft. Make sure you choose an account that doesn’t punish your mistakes with massive fees or nonsense charges to move your money.

Make your ATM visits free

Many Internet-only banks offer a free ATM visits at any ATM in the country. In most cases, you’ll be charged initially, but your bank will reimburse you for the fee.

Returned deposit fee

If you deposit a check that bounces, some banks charge a fee. Big banks can charge up to $15 for returned deposit items, and $25 for an internationally returned deposit item. However, small banks and credit unions don’t. Hopefully you won’t encounter any bounced checks, but it’s better to be safe than sorry.

Lost debit card fee

If you misplaced your debit card, it’ll cost you up to $7.50 to replace. If you need it replaced ASAP, then it’ll cost you up to a hefty $25 expedited delivery fee for a new shiny piece of plastic. To lessen the blow, you don’t have to request expedited delivery on your new card—you can simply use cash you have on hand or your credit card for payments until the new debit card arrives.

Paper statement fee

Banks charge customers $2 a month for paper statements. To avoid this fee, search for a bank that waives this fee or look into an account that enables you to bank entirely electronically.

Returned mail fee

When you move, a mail-forwarding request with your post office may not be good enough for your bank. Many banks print “return service requested” on their envelopes, so your mail gets sent back to the bank if it can’t be delivered, upon which, a number of banks charge a fee. These fees can add up, so make sure you update your address with your bank upon moving.

Human teller fee

Some banks charge a fee for using a person to handle transactions. If you’d like the ability to consult a teller, seek out bank accounts that don’t levy this charge.

How to eliminate those fees

Don’t limit your banking options to banks with branches. Internet-only banks, like Ally, Axos Bank and Charles Schwab’s online banking, don’t have monthly maintenance fees, ATM fees and offer higher interest rates. Credit unions also tend to offer fewer, and cheaper, fees than traditional banks.

In fact, if you’re interested in opening a savings account, credit unions and Internet-only banks often pay higher interest rates on savings accounts in opposed to brick-and-mortar banks. Luckily, you don’t have to do all of the work when searching for a fee-free checking account with perks because Magnify Money’s got you covered. Just fill out the simple tool here.

Now that you’re aware of these fees, you can take necessary steps to avoid the ones that may put a strain on your finances. After all, as a new graduate, these pesky fees should be the last of your worries.  When all else fails, just keep in mind, you’re not obligated to stay with your current bank. If you’re not too fond of the features they offer, revisit, it’s that easy. Chances are, you’ll find another convenient institution where you can bank without being charged any fees.

Got questions? Get in touch via TwitterFacebook or email info@magnifymoney.com.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kelly Harry
Kelly Harry |

Kelly Harry is a writer at MagnifyMoney. You can email Kelly at kelly@magnifymoney.com

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Time Perspective

MagnifyMoney Presents Time Perspective and Financial Health Study in Poland

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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We just finished an excellent day in Warsaw, Poland where we presented the findings of our research with Professor Zimbardo.

There are so many applications of Zimbardo’s work, and we really enjoyed having the opportunity to share our work, and learn from others.

We presented during a special session on Finance and Time Perspective. After our presentation, we heard from a team in Poland who did similar research on time perspective and financial literacy. It was amazing to see that they found very similar findings about each time personality, and its impact on financial decisions. It was also interesting to see the difference in culture.

The past negative individuals in Poland literally keep their money in their homes, in cash, rather than put in the bank. In the US, they keep it in a savings account (we call it cash, but not literally), rather than investing. And future oriented people in Poland are likely to be mis-sold insurance, a truly global risk.

We had an excellent reception to our presentation, including a healthy debate and vigorous questions.

Time Perspective & Financial LiteracyWe also met people who are using time perspective in therapy sessions to help treat people. There were some amazing stories about losing weight and ending drug addictions by rebalancing time perspectives.

Perhaps most exciting was the desire of academics from multiple countries who are looking for ways to leverage our research so that they can educate (starting at university) people on time perspective and financial decisions.

This was a proud moment for MagnifyMoney, as our research has now been shared with the academic community more widely. Our real hope is that time perspective can be used to help people make better financial decisions, and today’s conference was a great way to continue to spread and improve the message.

 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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