Life with out a Bank Account. (is not fun) Part 2
The struggle is real…very real.
To be honest, I really didn’t think that living without a bank account was going to be THAT hard. I assumed I would just carry a lot of cash, and make a couple extra trips to pay bills. Boy was I wrong.
Finding a Job
In my quest to understand and relate to unbanked people in America, I first needed to find a job. In Part 1 I mentioned I would be starting this journey with no job and an actual need to find one (I had no real runway). The goal being to find something quick and non-traditional.
I first decided to try the “on-demand” market, Task Rabbit, Uber, Lyft ect.
Well, interestingly enough:
Actively looking huh?
As I continued my search I was not all that surprised that the same rang true for Uber, Lyft and most of the other “on-demand” darlings. (Note: I didn’t look at every “on-demand” company in NYC, so there may have been one that offered pay with no bank account)
After checking out a few more companies, I couldn’t help but begin to feel a bit of discrimination (which as a white male I don’t experience often). I’m more than qualified to “Task” but because I don’t have a traditional bank account I can’t? (Side note: I find it interesting that the type of services they offer to fulfill are geared towards individuals who may be in transition or fall into a lower income bracket.)
At this point I had wasted a good week and my wife was like WTF. So I hopped on Craigslist and the first listing in the Jobs section was: “Help wanted hauling boats on the South Shore” so I picked up the phone and 10 minutes later I was in my car driving to meet Bob the Boat Hauler, having no clue what a boat hauler was or how much it even paid.
So what’s a boat hauler? On the south shore of Long Island, there is a large stretch of the coast with a canal system.
Storing boats in a Marina is expensive…
So along came Bob and his brother Scott who created a business to solve this problem. They outfitted a barge with a crane, and as winter approaches, they go up and down the canals lifting boats out of the water and placing them (on blocks) in peoples back yards. When spring comes around they put them back in. Yes they have a monopoly, and at $200-$500 per boat, per lift, it’s a pretty decent business.
So for $125 a day cash, I became a boat hauler for the month of December.
Fortunately for me the month of December was unbelievably warm! Bob said that they were usually hauling boats in the snow by this time. The work wasn’t all that hard and I got the hang of it quick. (and for all those wondering I only fell into the canal once)
But alas, all good things must come to an end and unfortunately by the time Christmas came around- my days as a boat hauler had come to an end.
Now let’s discuss the joys of living on “cash only” during this time period.
This was by far the most inconvenient thing EVER. Now fortunately for me I own a car, so for most of my basics (rent, utilities, ISP, phone) I was able to drive to pay. Everything else I had to pay by money order and mail out. This presented a entirely new set of challenges.
First I had to comb through all my bills online and find where the hell to mail the money order (to which was extremely time consuming) then I had to actually go mail it spending additional money in the process: money order fees, stamps, and gas. In addition to that, I had to account for the processing time, as it relates to when the payment was due. FML- I mean seriously- who has the time to do all this. (I am aware that you can go to a check cashing place and use their bill paying service for a fee, but this just wasn’t a option for me.)
Side Note: I was lucky in that my landlord, a sweet old lady, lives within driving distance, but delivering the cash took multiple attempts as I wasn’t just leaving a knot in her mailbox. Although after my 2nd attempt I did contemplate just giving her a shoebox full of singles.
Going to pay my utilities and ISP, was BA-NANAS. I was SHOCKED how many people show up to pay these bills in person (many of them taking the bus). Luck would have it that while I was there the line got backed up, and all hell broke loose! As the woman in front of me took a swing at the guy in front of her, I longed for my banking app.
Advice: If you need to cash a personal check- you may as well voluntarily go down to your local precinct and process yourself.
During the month, my mother took pity on me an wrote me a personal check. Luckily she banks with a big bank so I was able to go into a local branch near my house and cash the check. After playing a game of 21 questions with the teller, all that was left to do was have my license scanned and copied and have ALL of my fingers- finger printed. At least they gave me a wipe. :-)
Running out of Cash
Living on a cash only diet means planning out how much cash you may need within that given day or time period. Remember: NO BANK CARD = NO ATM
My planning skills were poor on numerous occasions.
I live on Long Island, but I’m a quick train ride into NYC, so I find myself there often. One afternoon after hauling boats I ventured into the city to meet a friend for a Pre-Christmas drink- which turned into many, many drinks. I suddenly found myself in a nightmare situation. We had racked up a BIG tab, and I didn’t have enough cash to cover my half. Luckily my friend took pity on me and covered what I couldn’t (he didn’t really have a choice) and was kind enough to leave me with $20 cash to get home. As I walked into Penn Station to catch my train I was feeling good (aka drunk). I had 15 min before my train left and was quickly seduced by the smell of pizza. $10 later I was a pretty happy guy; 5 minutes after that, not so much. My pizza bliss was shattered by the realization that I had ate train fair.
My train was leaving in 5 minutes and I was in all out panic mode. So I did what any drunk person would do- started asking strangers for the $5 that I was short in train fare.
The situation was beyond ironic, as “needing train fare” is the #1 ask of the homeless people and crackheads in Penn.
After asking about 5 people who wouldn’t even acknowledge my existence, the police came over. After a quick explanation and check of my license, an officer who- by pure coincidence- lived in my town, threw me a $5 spot.
After a solid month of this craziness I was literally forced to throw in the towel. Bills were going unpaid and my wife had run out of patience, the latter being the driving force. So as of Jan 1, I’ve been back on the proverbial sauce (bank account) and took a part-time consulting gig, which pays the bills and gives me the time work on this project.
My life without a Bank account was hard. Some of the most routine tasks that we all take for granted are done with a basic checking account. Not having one is not only inconvenient and expensive, but also can be dangerous. Over the course of the month I spoke with a lot of unbanked people, many of which told me they have to take separate trips to pay each bill because they fear being robbed. That’s just crazy.
So the big question I had was: why?
So everywhere I went I asked the question. The biggest reason I heard was banks are declining them because they had a previous record of financial mistakes, such as bounced checks or relatively minor overdrafts. In fact, many Americans have effectively been blacklisted from major U.S. banks because they’ve failed background checks. Other’s admitted they were here illegally, and surprisingly, many people said that using alternative financial services was all they knew, stating that “it’s what their families have always used.” I was blown away by that statement.
My goal in doing this was to learn first hand the struggles that millions of Americans face by not using a traditional bank, and it was my hope that with that knowledge we could build something to help solve the problem.
With the current regulations in place, specifically in regards to MSB’s, it will be challenging for a start-up to enter the space (to prove a concept), without already having some significant funding. Furthermore, I’m not 100% convinced that that one product will magically solve this problem. I think it will take the combined efforts of many different start-up’s working on many different products and solutions, the sum of which, will begin to create a fundamental change. There are so many AWESOME companies in the Fintech space that I think are well on their way to contributing to that change.
So where does that leave me and my team?
At this point my eyes have been opened to many different challenges and problems that a vast majority of lower income people face (whether they have a bank account or not). So while my team and I were vetting out and exploring ideas on how to solve some of these problems, one in particular actually called me on the phone.
NOTE: Things got a bit rocky for me after Christmas, I had already put off paying a few bills from October, so my debt was quickly beginning to pile up.
That’s when the phone calls began…
If you’ve ever had the privilege of being called by a Debt Collector you already know where I’m going with this. For those who have not, let me try and paint a picture for you.
Relentless. Insulting. Threatening. Harassing. Google it.
Being stalked by these 3rd party debt collectors is an absolute nightmare, and although there are laws in place to protect you from inappropriate behavior- guess what- they still use these disgusting scare tactics. Just last year the 2 biggest agencies on the planet were caught and fined. READ THIS.
Now, I do believe that if you owe a debt it should be paid. But seriously- it’s 2016- and we’re still harassing people over the phone? Who even uses the phone?
Phase 1- My team and I all agreed that this is a problem worth solving, and we’ve been digging into the industry thoroughly over the past month. It’s obvious that there is a major problem with the current methods of collections specifically for consumer debt, we believe debt collection can be done effectively using a simpler approach (which I’ll keep under wraps while were testing). But if we’re right, we’ll be able to offer consumers much more than a payment plan and pleasant experience.
Phase 2- We believe there is a much larger problem on the business side. The disconnect between creditors and 3rd party agencies is really alarming and costly (I’m being vague on purpose). If phase 1 is even mildly successful, we could make a serious play to begin eliminating the need for 3rd party agencies.
Ambitious I know….Stay tuned.