Unbanking vs. Underbanking: How to Break Up with the Financial System
By Daisy Luther
Sometimes you can make a clean break and other times you have to remain “just friends”.
The US government actually has a name for people who have no bank accounts – they call these folks “the unbanked”. The FDIC defines the unbanked as “those without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another.” Another term is “the underbanked” – “people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked can be characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as check cashers, loan sharks and pawnbrokers.”
According to the government, the above scenarios are crisis situations which must be rectified for “your own good”. There is legislation on the table in many states to set up banking facilities for the unbanked and underbanked. The assumption is that most folks who do not deal with a bank are too poor to do so. This could be true in many cases: high minimum balances, bad credit history, NSFs, and account fees can all preclude having a bank account for those in difficult financial straits.
However, the government has a couple more reasons to insist that everyone should have a bank account:
1.) Ease of confiscation
We need only to look at the horrible situation in Cyprus to see how bank accounts are like all-you-can-steal-buffets for the powers that be. A suggested
theft TAX of up to 20% of the money in Cypriot bank accounts may be levied in order for the country to meet it’s staggering debts in the terms of the proposed EU bailout. The banks of Cyprus are loaded with the money of residents and businesses of other countries that have used them as a tax haven. The banks have been closed for several days and frantic customers are left to withdraw the maximum daily balances from ATM machines in an attempt to salvage what they can. Many people fear the banks will never reopen their doors.
Think it can’t happen here? I wonder if the people of Iceland, Greece, Ireland, Hungary, Argentina, Spain, and Portugal thought that too.
The second reason that “everyone should have access to banking services” is the digital trail that it leaves. Every dime you receive and spend out of these accounts is part of an intricate system of surveillance. When your money goes into a bank – any bank – Big Brother knows about it. It’s a simple matter of compiling information via your social security number (or other federally- assigned number) to find out how much you make, how much you have, and where it comes from. This can be used to prosecute you for tax purposes, to locate you through where your pay comes from, and to follow your personal money trail for a variety of different reasons.
It can also be used to track your spending – Big Brother can find out that you spent $2000 at a gun store, that you purchased online from a prepper supply website or that you bought some books with “questionable” content in order to paint you as a threat.
So, in this day and age, is it possible to get by completely without a bank account?
It’s tough. Most work places prefer to pay through direct deposit. Many landlords, mortgage companies and finance companies do business through direct debit. You’re going to pay some steep fees if this is the route that you choose to go. For some, it might be worth it, particularly if you only have a few transactions in a month.
Here are some places you can cash checks for a fee:
- Check cashing depots
- Some retailers like Walmart, 7-11, and some grocery stores (the number of these is dropping rapidly)
- Pawn shops
- The issuing bank will sometimes cash a check drawn from one of their accounts for a non-account holder
- Some prepaid credit card accounts will accept a direct deposit (in my opinion, this is nearly as unsafe as having your money in a bank account)
- Through a friend or family member’s account (also risky – for both you and the account holder)
Here are some ways you can pay bills without a bank account:
- In person, with cash, cashier’s checks, or money orders
- Through the mail, with cashier’s checks or money orders
- Online, with prepaid credit cards
- Through a kiosk using a prepaid credit card
- At a check-cashing depot or retailer
Your next option is underbanking. For some people this may be the most realistic way to break up with their bank – it’s the “just friends” version. If you have a lot of transactions that go through your account every month, it isn’t necessarily practical to get rid of your account. Keep in mind that all of the above methods of unbanking still have a component of financial tracking. The checks and bills still have your personal information tied to them in most cases.
When you underbank, you still have an account. Set this up with the lowest possible fee and the lowest possible required balance. Shop around to find the best deal. Consider a credit union or community bank instead of one of the big mega-banks. They are slightly safer, emphasis on slightly.
Your paychecks from work can be directly deposited, which will make your employer happy. Employers rarely want to do something outside the norm, and if everyone else gets their pay directly deposited, writing a check for you will make you stand out – the opposite of what you want to do. As well, any other checks you receive, like refunds, tax returns, etc., can be processed through this account.
The goal here is to keep as little money as possible in this account. Banks are no longer the safest place to keep your money, and the .00001% of interest you will accrue is just not worthwhile.
Immediately upon payday:
- Pay all your bills online or through a kiosk out of this account – rent, utilities, credit card payments (hopefully you don’t have those)
- Buy necessities like groceries if you need to reduce the amount in the account for withdrawal purposes
- Calculate the amount of payments that will be coming out of your account between now and your next pay (rent/mortgage, car payment, insurance)
- Remove all money except that required for impending debits and your minimum balance. Get it in cash.
Avoid Financial Surveillance
The government wants everyone to have a bank account for another reason besides quick accessibility for the purpose of thievery. Big Brother wants to know what you earn, what you spend, and where you spend it. Every penny you spend could one day be used against you, as more and more things become illegal in the police state that is taking over the western world.
Use your bank account as little as possible if you’ve chosen to underbank:
- Buy stuff with cash
- Skip registering your belongings by serial number for warranty purposes
- For heaven’s sakes, don’t get one of those “customer loyalty” cards that track every purchase you make and provide you with “rewards” or “points”
- Buy from places that don’t track you, like yard sales, Craigslist, farmer’s markets, roadside stands, your brother’s friend’s sister’s boyfriend
- Work for cash: this is another suggestion that won’t work for everybody, but if you can do some odd jobs for cash, even if you make slightly less money doing so, this is money that can’t be tracked.
Think about how your purchases tell a story about you that you might rather keep to yourself. Are you buying lots of farm equipment, soil amendments and seeds? Are you buying ammo every week? Are you stocking away large quantities of food or medical supplies? Have you recently purchased 2,347 books on different guerrilla warfare tactics? OPSEC is more than just keeping your mouth shut about your prepperly ways.
Ditch the Dollar
Although you require some fiat currency to function in today’s society, as well as some in an emergency fund, consider using other forms of currency whenever possible. The following suggestions won’t work for everyone, but some folks may be able to ditch the dollar in the following ways:
- Engage in the barter system: trade goods and services with like-minded people.
- Keep precious metals like gold and silver in a fireproof safe for your “savings account”
- Immediately convert fiat currency into tangible goods: food, ammo, home defense items, tools, etc.
- Work towards self-sufficiency – if you buy less, you can earn less: grow your food, repair your own home or vehicle, do things manually instead of using expensive equipment, lessen your dependency on the grid
- Simplify – this goes hand in hand with self sufficiency: find your entertainment from library books and online resources, skip eating out, take a walk instead of joining a gym – the less you feel you need, the less money you will have to earn.
The decision to unbank or underbank is unique to every individual. The further away you can get from “the system” the more privacy and security you will have. The suggestions above are not meant to be comprehensive – they’re meant to get you thinking about how you can disengage. As always, your suggestions in the comments can greatly benefit others!
About the Author
Daisy Luther is a coffee-swigging, gun-toting blogger who writes about current events, preparedness, frugality, voluntaryism, and the pursuit of liberty on her website, The Organic Prepper. She is widely republished across alternative media and she curates all the most important news links on her aggregate site, PreppersDailyNews.com. Daisy is the best-selling author of 4 books and lives in the mountains of Virginia with her two daughters and an ever-growing menagerie. You can find her on Facebook, Pinterest, and Twitter.