Tale of The Plumber & The Check Cashing Place

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MoneyDownDrain30 minutes after I gave my plumber a check, my pocket rang.  It was a check cashing place asking if I had written this to him.  I said, “Yes.”  When he finished the job a couple days later, we had this actual conversation:

Me: If you don’t mind me asking, how much do they charge to cash a check?

Dumb Plumb: $11, I think.

(I found out it’s actually 12 PERCENT of the check amount.)

Me: Did you know that you can cash a check for free at the bank on which a check is written – even if you don’t have an account there?

Dumb Plumb: Yeah… But I like this place.  I go there all the time.

Me: This is none of my business, so don’t feel obligated to answer.  Do you have a bank account?

Dumb Plumb: I used to, but I don’t trust banks.  I keep my money out of there…  My grandma says I am giving my money away (by using the check cashing place).

Me: Your grandma is a smart lady.


People are gonna do what they’re gonna do

CheckCashingPlaceFrom this $1,200 job alone, he gave the check cashing place $144.00 of his and my hard earned money.  Next time, I’ll offer to cash my check for him on the spot for only 10%!!

My plumber is 31 years old.  Nice guy.  Smart enough to do good work.  He should know better.  There’s always the possibility that he owes the IRS some money and is hiding it so they don’t snatch it away.

A Solution

Assuming you aren’t dodging the Tax Man, here’s a way to get free checking.  My Wells Fargo checking account wants to charge $10 per month unless I meet one of these requirements:

  • 10 debit card purchases/payments, OR
  • Qualifying total direct deposits of $500, OR
  • A $1,500 minimum daily balance, OR
  • A linked Wells Fargo Campus ATM or Campus Debit Card

Here’s What I Do

I don’t want to think about this – at all !!  I don’t use a debit card for purchases. I don’t want to worry about a minimum balance.  I’m not in college.  I don’t have a steady job that makes $500 in direct deposits.

How do I avoid paying $120 a year for a checking account?  Since that $120 is money left after paying taxes on earning it, it’s really more like $150-$200 earned at a job.

  1. Open a free brokerage account at one of the big firms. I did mine at Fidelity Investments.  Any of the biggies will do (TD Ameritrade, Charles Schwab, Merrill Lynch, etc.).
  2. I had them make mine a “Margin” account. This makes life easier for you if you ever want to use your brokerage account as a hub to shuttle money between bank accounts the same day.  A “margin” account is not necessary for the free checking work-around.
  3. Wells Fargo recognizes a deposit from a brokerage house like Fidelity as a direct deposit. I set up a couple automatic $500 monthly transfers. On the 1st of the month, I send $500 to my Fidelity account. On the 7th of the month, I send $500 from Fidelity to my Wells Fargo checking account.

Like a 1970s hairdo, set it and forget it.  I’ve had that checking account for 11 years.  I’ve saved over $1,320 (11 x $120) and counting.  Obviously, you will need $500 saved for this to work.  If you are broke, save $5 a day and you’ll have $500 mid-August.  Then you will start saving that monthly bank fee – for life!

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