I am just guessing there won’t be any bank takeovers reported today as we head into the pre-election weekend. The longer the economic turmoil continues, though, the greater the potential for banks to falter. In normal times, when you have money, you want to keep it in the bank as long as you can so you can earn more interest on it. That’s a habit you may want to reverse now. With interest rates so low, all the more so after this week’s Fed rate cut, it makes sense to concentrate instead on keeping your money safe. When you have money, keeping money in the bank is still a good way to protect it from theft. Still, here are seven things you can do to have a little less of it at risk in the bank:
- Pay bills as soon as they come in.
- Pay bills online when you can instead of writing a check that might spend several days in the mail.
- Pay off credit cards as often as once a week.
- Pay for items you order in advance when you can.
- If you have taxes to pay, don’t wait for the deadline. Pay as soon as you have the money together. Consider making quarterly income tax payments even if it might not be required.
- Also don’t wait for deadlines to make loan payments. The payment might be due at the end of the month, but it is perfectly okay to pay at the beginning of the month.
- If you are saving money to use for regular loan payments, keep the money in the same bank where the loan is.
All these suggestions represent a shift in priorities, so that being very sure you meet your obligations becomes more important than earning interest on your bank balances. In this way of thinking, when you know you have to pay for something you’ve received, you want to pay it as soon as you can. When you have money, this is the ultimate way of protecting it — using it to discharge your obligations. And it is simpler too. It might even make you feel more prosperous about your financial situation, as you say, “I must be doing pretty well if I can pay all my bills as soon as they come in.” In times like these, that feeling of prosperity is worth much more than the pennies you might be earning in interest.