Finances & Money

Poor Financial Skills Make Life More Expensive

financial skills, financial tips, financial advice

Having nothing else to do while I waited my turn at the Walmart customer service counter, I did a little people watching. In the 5-10 minutes I was waiting in line, I witnessed two people in front of me request to do a money wire transfer to a Walmart in another city. The recipient would then be able to get the cash at the customer service desk of their Walmart. Of course this service had a cost associated with it:

  • Person #1 transferred $50, which cost them $4.50.
  • Person #2 transferred $600, which cost them $9.

I couldn’t figure out why someone would do this. My mother-in-law and I transfer money between each other for various reasons all the time. We do it through our bank’s online portal and it doesn’t cost us a cent. We happen to use the same bank, but it also has the option to do a transfer to an account at a different bank.

Why would someone pay to send money, when they could do it for free?

As I continued to stand in line, I concluded that the answer is, maybe one or both of the parties involved do not have a bank account. Maybe they have had some financial management issues that have resulted in banks not allowing them to open a checking account because they just are too high of a risk.

I have no idea whether this was the case or not, and it wasn’t any of my business. But it did start my brain down the path of thinking of all the ways that bad financial management skills makes life just flat out more expensive.

  • Wire Transfer Fees : The subject that started this whole thought process. If a person is unable to get a checking account due to past transgressions, they cannot take advantage of free account to account transfers. They also couldn’t just write out a check and mail it to the recipient. They have no choice but to pay for the wire transfer service, unless they want to take a very risky chance of sending cash through the mail.
  • Interest Rates : People who have had past financial issues may not have a very good credit rating. This will likely result in higher interest rates for any borrowing they wish to do, whether it be for a home, car, or unsecured line of credit.
  • No Cash Rewards : People viewed as high risk won’t get many offers for credit cards with rewards programs, or credit cards at all for that matter. I’ve heard of people earning free or nearly free trips all through credit card rewards.
  • Check Cashing : If you don’t have a bank account, you may have to pay a fee just to cash your paycheck. Paying money to get your money sounds ridiculous, but for some people it’s a reality.

Having poor financial management skills can lead to a bad financial state that can have an impact on all aspects of life. When you have to pay fees for the most basic financial activities, it could be a spiral that’s hard to recover from as so many of your resources are used paying for the consequences of past mistakes. Once you start digging the hole, it’s hard to stop.

What do you think, Clever Friends? How else could having poor financial management skills make life more inconvenient or more expensive?

Brought to you courtesy of Brock

About the author

Brock Kernin


  • A few more ways:

    – Overlimit or overdraft fees
    – Late fees on bills
    – Unable to afford a large but cheaper per unit package, so always buying the cheapest but more expensive per unit item. (sometimes smart, but best to have option to consider)
    – Has to tolerate poor work situations because can’t afford to be without a job
    – Can’t get bank loan so may have to resort to payday or similar high interest rate loans

  • The fees dogpile: when you’re scraping by on very little, and you slip by a little bit, you don’t have any leeway to make any mistakes. You’re then charged a late fee, and that likely comes with interest on top of it. Your minimum balance due keeps growing while your ability to pay doesn’t, and when you can’t make that minimum, the late fees and interest continue to pile on. It very quickly becomes a mire.

  • Overdraft fees, being unable to set up an emergency account – you really just keep losing. But once you can start getting a few of those things under control, it becomes so much easier to get everything under control.

  • I’ve seen scenarios where renters would have to put down a much healthier deposit than they normally would because of financial mismanagement issues in the past. And then there’s the old layaway plan that costs too much that people use around the holidays. Oh, and the same applies for cell phones too. You get much better deals on them if you have a good credit score.

  • @latoya – on one hand it certainly seems logical that people that have financial issues have to pay more because they are a greater risk….but it’s a self-feeding cycle because having to pay more MAKES them a greater risk!

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