Woah, I can’t believe time has flown by this quickly. It seems like just yesterday I was walking into my banks, closing my accounts, and requesting a cashier’s check with the remaining funds. Why did I do this? My wife and I were looking to consolidate our finances after our wedding and wanted to experiment with using a bank without any physical branches in our area. Ultimately, we selected Capital One as for this grand experiment. That was three months ago, so I wanted to share the results of this experiment with all of you! But wait, there is more. Over the last three months, this experience and others has taught me a HUGE life lesson that I would like to share with all of you.
An Update on banking without branches
Really, I’m just trying to build up the drama here by calling this a grand experiment. In truth, there is nothing too risky or difficult with deciding to leave a traditional brick and mortar bank and only bank with a company like Capital One (referral link), Discover, etc. Before the switch, my wife and I had accounts with four different banks. Now, we are down to one….ah the peace that has come with only having to log into one account. Happily, I would like to report that we the switch has not impacted our life one bit. Those were the results we were hoping for here as we continued to find ways to simply our finances.
In the article I linked in the introduction of this article, we walked through our concerns about making the switch and I dispelled each concern with why I thought it wouldn’t be a big deal. Now, I’m going to revisit each of the concerns and see if my predictions were accurate:
Concern #1 – Depositing Checks. My response to this concern was that Capital One offers mobile deposit for up to $5,000 in checks in one day. As it turns out, my limit was increased to $50,000 after I wrote the initial article. I’m fairly confident that I will never cash more than $50,000 in checks in one day….or if I do, I will welcome those days with open arms. Plus, it is really, really nice depositing the checks from the comfort of home versus driving to the bank/ATM. My prediction proved right on this one!
Concern # 2 – Access to Cash. I dispelled this concern after learning that Capital One offered free access to over 20,000 ATMs nation wide and 5 within a one mile radius of my house. In the last three months, I can count the number of times I withdrew cash from an ATM on one hand and when I did, it was really nice being able to do it at the ATM in the 7 eleven that is two blocks away from my one. Once again, my prediction proved right!
What Life Lesson Did I Learn?
Am I really shocked about this?? Heck no. This was about as safe as a departure from a norm as possible. But I think there is a larger lesson here and one that was driven home by ditching my traditional bank in favor of an online one. Hopefully a lesson we will write more about on this website over time (As we have already over other areas/topics as well). The lesson: Don’t be afraid to challenge financial norms or the lessons we have been taught about finance throughout our life. I grew up driving through ATMs or depositing checks in a bank with my mom and we probably did this hundreds of times. It was great, we caught up with one of her friends that worked at the branch and I always received a free treat of some capacity (candy as a child…coffee as I turned older). This is what banking was to me and this is what bank is to so many out there. When I moved out on my own, I didn’t even consider Capital One because my first instinct was to find a bank that had no fees and was conveniently located to me. However, finally, my wife and I were creative and willing to try something that didn’t feel natural and was a little uncomfortable. And you know what, life continued without missing a beat. All because we challenged something we were taught throughout our lives.
Switching banks isn’t risky, as I mentioned earlier, and their really wasn’t a financial benefit from doing so. Fine, I’ll show you an example of where Lanny or I challenged a financial norm that can benefit you financially. A few months ago, Lanny began writing about his tax-adjustment series because he was tired of paying a ridiculous tax burden. No one likes paying the taxes. What norm did Lanny attack? How many of us were told to funnel our money into a Roth 401k vs. a Traditional 401k because you won’t pay taxes later? Probably most of you out there because I sure as heck know the two of us were. One day, Lanny decided to attack this financial norm and perform an unbiased analysis in an article to determine whether a Roth or Traditional 401k provided the greates benefit. Judging by the tone of this article, you can guess which option won. I’ll be honest, it took me a while to get on board with the idea because it was different from my perception of the most efficient way to save for retirement. But he kept challenging the assertion and trying to sway my opinion about the topic. I wasn’t convinced until I finally saw the results trickle in and see his portfolio skyrocket as a result of it. Then, only then, was I willing to consider this new option. Of course I switch my 401k from Roth to Traditional shortly after.
Alright, now I’m stepping off my soapbox here. I entered the process with 4 bank accounts and I leave with only one account and a completely different perspective on an aspect of life. Over the last three months, I have challenged one norm and Lanny tackled many through his there part tax series all with extremely successful results. Why am I not challenging more of them? I leave this article and my conversations with Lanny thinking “what other norms are there for me to tackle?” They don’t all have to make a large impact, but a bunch of small battles can add up quickly. One of our blog’s first articles was about 7 easy ways to save money and as I re-read the article earlier, I realized we wrote that article in the spirit of this lesson as each of the seven ways to save opposed the norm or practices that were common among co-workers, friends, and family. Surely there are more than seven norms to tackle out there and now it is time to begin finding and challenging all of them.
Do you use an online bank exclusively? What easy financial norms have you challenged in the past? Any suggestions of some norms to challenge going forward?