This was my experience in the 80s too. Most banks wanted a big deposit (equivalent to several months’ worth of pay at the time) and wanted that much kept as a minimum deposit, plus they wanted to do a credit check. My father-in-law finally sponsored us into the credit union that he used, which required $5 for a minimum balance.
Hell I’ll give you an example where I find the traditional money manager advice doesn’t make sense when you are dirt poor.
Telling a family that spends $15 dollars a day on Starbuck’s lattes to cut that luxury makes a lot of sense and the savings add up, they can make them at home or just go without.
However telling a dirt poor person to stop drinking a cheapo beer every night after work saves $1 a day, when that beer could be one of the absolute few luxuries they allow themself. So at the end of the month they have an extra $30 USD and the increased stress and bleakness of their situation has reduced their quality of life so much they seriously contemplate just becoming a drifter, and WTF is $30 USD going to do to drastically improve your life?
When I was absolutely dirt poor and eating ramen and only buying clothes off the clearance rack at Wal-mart the few luxuries I spent money on were the things that made my life feel full and fulfilled, if I had to cut them then what is the point of even getting up every day? What is the point of a life with no enjoyment, where all you do is exist?
Damn I missed the edit window but I wanted to add something else. I have seen people advise that a computer and ISP along with a telephone and television are luxuries that the dirt poor should cut, this is the absolute worst advice ever!
People do not advance in society by being ignorant robots that have no friends and no social interaction, completely out of the loop culturally and with no way to look up information or communicate, just wake up and go to your McJob everyday don’t talk to anyone don’t educate yourself and one day you will be the CEO.
Thats not how society works at all, in fact one of the things keeping people poor is lack of social connections and ability to access information.
Think of how many times in a day you look up information online, from side effects of an OTC drug to labor laws to make sure your boss isn’t screwing you over, to where to go to file for government related services. You must make online appointments now to deal with the state department for anything really.
Completely cutting yourself off from education, news, culture, and social interaction and communication is a great way to stay dirt poor!
One of the guys I dated in the US invited me to a church meeting, it was one of those microchurches; about 15 families. The congregation later had lunch at the dinner across the parking lot. At one point when we were alone, the pastor asked me what did I think about his Church: I said “it’s not for me, but I think you do a great job of teaching people how to budget.” He laughed hearhtily, I may have been the first person to attend one of their meetings who caught on to that.
His congregation kept saying “I was poor, I never had any money, and now that I give X% to the Church, Our Lord’s care is making sure I always had money!” - the pastor had spent time teaching each of them about budgeting and guiding them on decisions such as which debt to pay first, and he’d done a good job. These people were low-income, not no-income, there was enough for him to work with - but without his advice, they would never have been able to run the calculations needed to figure out which debt to pay first, or to learn that it’s better to avoid debt if at all possible, or that there is such a thing as good debt (most of them still weren’t at the point of being able to figure good debt from bad) and they were also the kind of people who’s willing to trust a pastor but who see someone called “financial advisor” as The Enemy, so they would never have contacted one.
But sitting in front of Jerry Springer or playing video games all day are also great ways to stay dirt poor. Communications tools are only tools – you have to know how to use them, and that’s where good financial education comes in.
There are two things that a good personal finance advisor can do for a very poor person. The first, as Nava explains, is to actually teach the basics about budgeting, debt, and how the system (bank accounts, interest, etc.) works.
The second is to help make a plan for being less poor. Whether that’s a plan for getting more education, or finding a better job, or moving to a better place (e.g. closer to work so transportation costs less, or someplace where better jobs are available). That’s the context in which giving up the $1.00 beer makes sense. The point of the life with no luxuries is to use it to get to a point where you are no longer dirt poor.
I’m curious grude, since you talk about being dirt poor in the past, what you did to get out of that situation?
Because people writing bum checks only makes money for the bank if the writers can and will pay the penalties.