Put Your Money Where it Will Do the Most Good

The economic crash of 2008 and the lingering recession to borderline depression is leaving a lot of people wondering what to do with what little funds they have. You probably have wondered more than once if a bank is truly the place to leave your money? Would cash be better? Some people remember a time when banks were so strapped that they couldn’t cash a check and are starting to keep piles of cash for emergencies. With all of their recent irresponsibility and blame shifting you are probably wondering if you should give up on banks altogether.

If this is how your mind is leaning you might want to check out some of the development banks that are sprouting up around the country. Development banks are small, for-profit, insured banks serving a small community of usually low to medium income earners. These banks are usually willing to take on outside customers to help support their community. They have a high SRI (Socially Responsible Investing) number as their main goal is to invest in their community by funding loans to smaller businesses. Your money would not be going to fund multi-national mergers and your bank would not be considered “too big to fail”. They have a smaller focus area and give most of the perks of larger banks, such as being FDIC insured, while exhibiting none of the risks exemplified by some of the large banking conglomerates in recent years.

By putting your money in the Blackfeet National Bank or the City National Bank of New Jersey you are able to appropriate your funds to a bank that thinks more like you. Instead of acting in interests of their major shareholders and board they are acting in the interests of the community that supports them. You will see that your money is invested in your neighbors instead of assisting an acquisition that will only support Wall Street at the expense of Main Street. If you are interested in having both a competitive rate of return and assist in the rebuilding of distressed communities, putting your money in a development bank is probably the right move for you.

Some of the community banks are even resurrecting the concept of social credit, allowing citizens to rebuild their standing within their financial institution more easily than they could within the punitive FICO score system. Moreover, by placing your money in a small bank you are sending a message to the larger banks. You are saying that you are a person, an individual worthy of being noticed, of being cared for, and that the banking relationship is symbiotic. They are able to make money because you, essentially, lend it to them first.

Start Early, Retire Happier

Regardless of your age, proper budgeting is essential to reaching your financial goals. “Failing to plan is planning to fail” is an old quote that rings true however most people don’t understand its true meaning until its too late. Lets take a look at a few scenarios where your goal is reach $750,000 in retirement savings with 8% growth per year:
# 25 requires $213 per month ($102,240 total investment)

# 35 requires $500 per month ($180,000 total investment)

# 45 requires $1,65 per month ($396,000 total investment)

# 55 requires $4,072 per month ($488,640 total investment)

Obviously starting at a young age provides you with a huge advantage with reaching your goal. Regardless of your age, you will need proper budgeting information and discipline to get to where you want to. Here are a few ideas on how to budget properly:
# Live within your means – Almost everyone wants to live in style and keep up with your friends and family. When it comes to money, suffer the pain of discipline today or suffer the pain of regret tomorrow.

# Count your pennies – Every penny counts. Go through your bills with a fine-tooth comb, question and justify every purchase, and do not be too proud to pick up change on the ground.

# Buy in bulk – There are certain perishables that you can save a ton of money on if you buy in bulk: toilet paper, toothpaste, condiments, etc.

Unless you are one of the lucky few (lotto winners, professional athletes, inheritance, etc) you cannot afford to let your hard earned money slip through the cracks. While money definitely doesn’t buy happiness, not having it adds unwanted stress in your life.