Utilizing Your Bank Account to Save More Money
This week, Maggie is chatting with Chanelle Bessette, a banking specialist at NerdWallet. In this episode, they talk about different ways for people to save money, the transition to mobile banking and more.
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Chanelle Bessette is a personal finance writer at NerdWallet covering banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal. She is also a spokesperson for the banking team, and her expertise has appeared in The New York Times, Vox and Apartment Therapy.
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To learn more about Maggie and her coaching and speaking services, visit www.maggiegermano.com.
The theme music is called Escaping Light by Aaron Sprinkle. The podcast artwork design is by Maggie’s dear husband, Dan Rader.
TRANSCRIPTION
Maggie Germano 0:05
Hi, and thanks for listening to the money circle podcast. I’m your host, Maggie Germano, and I’m a feminist and a financial writer, speaker, educator and coach for women. I’m passionate about making personal finance less scary and more approachable so that women can improve their relationship with money and take control of their finances. Every other week, I will interview an amazing, inspiring woman to talk about the issues that impact our money, our health, our independence, and more. We will touch on the societal and structural issues that we need to work together to change and the actions that we each have the power to take in our own lives. If you’d like to learn more about me and the work that I do, visit my website at Maggiegermano.com or follow me on Instagram @MaggieGermano. Thanks again for listening and I hope you enjoy.
Maggie Germano 0:55
Hey there, and thanks for listening. I’m your host Maggie Germano. And this week, I’m chatting with Chanelle Bessette, a banking specialist at NerdWallet. In this episode, we’re talking about different ways for people to save money, the transition to mobile banking, and more. If you’re curious about how you can most optimize your bank account and choose the bank that’s right for you, this episode is for you. Enjoy.
Maggie Germano 1:29
Okay, welcome, Chanelle, thanks so much for being here today.
Chanelle Bessette 1:33
Thanks for having me, Maggie.
Maggie Germano 1:35
So why don’t we start off by having you just tell us who you are and what you do?
Chanelle Bessette 1:40
Sure. So my name is Chanelle Bessette. And I’m a banking specialist and writer for The Personal Finance website, nerd wallet.
Maggie Germano 1:49
That’s great. And how did you kind of find yourself in as not only a writer but a writer about financial issues.
Chanelle Bessette 1:56
So I studied journalism in college and English, I did two decrees that were both very writing heavy. And I started off in the field of journalism, writing about business and technology. But during that same time, I was also paying down my student loans. And during that process, I realized there was so much I didn’t know about personal finance. And I really took it upon myself to learn all the things that I wasn’t taught in school about how loans work, how to save efficiently. You know, to be fair, my parents did try to instill a lot of those things for me, but, you know, we don’t really get a formal education on personal finance here in America. So, you know, I took that on myself, and just became more and more interested in the work. And during that time, I became aware of NerdWallet and decided to apply because their mission was very similar to what I was learning about and what I wanted to contribute.
Maggie Germano 2:50
That’s great. I love when it you’re able to find like a job or work that is a combination of the things that you’re interested in. So obviously, like writing, and then also the financial peace, which sounds like it was kind of a personal journey to be interested in that.
Chanelle Bessette 3:08
Yeah, definitely. And just knowing that the kind of content we write is about breaking down complex topics into easy to digest, you know, conversational pieces that people can read and learn from, it’s really valuable to me, because I think that a lot of us just sort of started off on the wrong foot, not knowing how things work. And it takes a lot of time, and trial and error to learn how finances can work for you. And you know, a lot of people end up in student loan debt or credit card debt at a very young age. So being able to learn how to save effectively, budget effectively. Yeah, it’s a skill set, you don’t really tend to get until later in life. So yeah, I really appreciate NerdWallet being able to provide that service for folks.
Maggie Germano 3:51
Yeah, it’s definitely necessary, like you said, with not having a formal education and how people unfortunately end up having to learn by default, as they’re kind of going through it or like having to solve a problem that they’ve gotten into or have has, you know, just fallen upon them. It’s unfortunate that that’s the case. But it’s great that there are platforms, such as NerdWallet out there.
Chanelle Bessette 4:14
Yeah, definitely. And, you know, the fact that the internet exists, makes things a lot easier than it ever has in the past. So yeah, you know, we’re all just figuring this out together.
Maggie Germano 4:22
Yeah. Agreed. So you are, you know, you focus on like banking and things like that. And so, one of the things that I wanted to kind of talk about with you is, you know, how has the way that people kind of use banks or approach banking changed over the years, obviously, like you said, the internet is a thing. And we all have our, our cell phones with us all the time. There’s apps, there’s no online banking, so lots and lots of things have changed. But how have you kind of seen that as far as banking?
Chanelle Bessette 4:56
Yeah, so thank you. Why is mobile banking is clearly The front runner thing that people are thinking about what they’re banking, being able to send money from anywhere, you know, connect their bank accounts to peer to peer payment apps like Zell or Venmo, or cash app. So a lot of people just really want the convenience and ease of being able to do their banking from anywhere, as well as being able to attach their accounts to kind of account aggregators like mint, or, you know, NerdWallet has an app that aggregates counsel as well. Or, you know, you need a budget, things like that, like being able to see your finances from a bird’s eye perspective, and being able to tell your money, what you want it to do at any given time. And so that’s clearly been a really big trend. And a lot of kind of smaller financial tech companies, known as Neo banks have been coming to the forefront as well. It’s funny, cuz they’re called Neo banks, but they actually aren’t usually banks, they usually partner with banks in order to be able to provide FDIC insurance. But they themselves are not often chartered by the government. So they kind of white label a lot of banking services in order to be able to provide them to consumers. But even so they’re able to be very, like nimble and don’t quite have, like the regulatory overhead that traditional banks do. So new banks are able to offer, they’re usually able to offer pretty high interest rates as well, because they’re not paying for branches and facilities. And they kind of pass those savings along to their consumers. Um, so So yeah, mobile banks, Neo banks. And then I would say, I’ve noticed a bit of a trend in kind of interest rate and bank bonus promotion chasing. And I think that’s sort of been a Passover thing from what Turner’s do with credit cards, like it’s sort of the same people who are tech savvy looking for like the best deal, maybe you have some money to play with that they can just roll over in a different bank accounts and get a bonus, then open a new account somewhere else, suddenly kind of trending. And we’ve noticed a lot of interest on our site with bonuses, promotions, and interest rates. So So those are the probably three biggest trends that I’ve noticed in recent years compared to previous years.
Maggie Germano 7:09
Yeah, absolutely. I’ve definitely seen that too. And I’m a big fan of getting higher interest rates on my savings. I’m also a fan of being able to access my bank from anywhere, and I actually have I use an online bank. So I don’t even have a branch that I can go into for things which when I was trying to get my mortgage and have like my down payment in the form of a check, that was a problem. But otherwise, it’s worked out really well. How have you kind of seen mobile banking as affecting how people kind of function with their money? Like, do you see it as a good thing? What do you kind of think about that?
Chanelle Bessette 7:46
Yeah, I mean, I think it’s really great for a lot of folks who might have mobility or transportation issues, you know, being able to do so much more remotely. Or, you know, even during the pandemic, a lot of people didn’t want to go into physical locations for businesses, or they didn’t want to physically handle cash. You know, I think looking back, we don’t know for sure if like COVID could pass via cash. But even so a lot of places went cashless. And so that was like a really big trend and finances in general. So yeah, remote contactless payments became a lot more accessible and easy to find. A lot of small businesses started accepting cashless payments more. But the thing is about mobile banking is that they’re, you know, like you said, needing to pay, pay a check or have a banker work with you face to face or being able to deposit and withdraw cash, you can’t do those things on your mobile app as easily. So a lot of banks have worked around this by offering ATM reimbursements for people who want to withdraw cash from an ATM that’s technically not in their network, or maybe the bank doesn’t even have a network. And so ATM reimbursements have become much more common and some are unlimited. Some banks do maybe like a $15 a month fee reimbursement cap. But then some join shared shared large ATM networks, where you can find them inside of retailers like CVS or Walgreens, or, you know, there’s a like all point or money pass or a couple of really big ATM networks that have 10s of 1000s of locations all around the country. So these kinds of services have become more common and kind of work around instead of having a branch. But in addition, banks that maybe do have physical locations, but know that people aren’t coming in, they’ve been trying to make their remote customer service more robust. So maybe they can send a check on your behalf instead. Or maybe they have a personalized banker who can talk you through getting a mortgage. Or maybe you can Tweet them or you know, comment on a social media post, and they’ll get back to you to get your details about a customer service experience. So all those kinds of things are becoming much more common even amongst all traditional banks as well.
Maggie Germano 10:02
That’s great to hear, it’s good, because I know some people aren’t totally sold on like having an online bank or more of like you said, like the neobank. And but they also need some of that accessibility of like you said, with maybe not having transportation or having other limitations. Obviously, banks are only open during like normal business hours, that can be hard for people who are working during the day. So it’s good to hear that some of those bigger banks are starting to kind of catch up with the 21st century.
Chanelle Bessette 10:32
Yeah, definitely. Um, yeah, for me, you know, I have a few bank accounts at different kinds of banks. But you know, I have an HOA payment that I have to send out every month for my condo. And I, you know, I don’t, I don’t keep a checkbook, I don’t mail checks, but my bank can do that, on my behalf, I, you know, there’s like a bill pay service, I just told them where it needs to go. And then at a set date, every month, they send it off for me. So I personally find it really great that a lot of these services now exist,
Maggie Germano 11:02
that is really great. So thinking about that, like some of the different kinds of tasks that your bank might be able to do for you. And you know, mobile banking, those kinds of things. What are the kinds of things people should be looking for, or questions they should be asking when, you know, they might be choosing a new bank, maybe maybe they’ve never had a bank account before. Or maybe they’re trying to, they’re unhappy with their current bank. So they want to switch what kinds of things they should they be looking for when choosing a bank.
Chanelle Bessette 11:31
So one of the top things we usually recommend is low fees and high interest rates as much as possible. There are banks that charge monthly fees, and I honestly hope that they kind of go the way of the dinosaur and stop charging people just to keep their money in their in their accounts. So lower no fees is definitely something that people should consider. Because those, those costs can really sneak up on you whether it’s $5 a month, or $10 a month, really adds up over time. And then high interest rates are kind of hard to find right now, we are in a low interest rate environment. It’s been that way, since the early pandemic, and we’re, you know, these things fluctuate, and we’re hoping that maybe in 2022, we’ll start to see them creeping back up. But if not, we know that eventually they will. So even though they’re hard to find, right, now, there’s a good chance that they will eventually come back. And beyond that, you know, it’s really about the convenience of banking in your life, what you need what works for you. So doing the research around finding, you know, if you do need to go into a branch, you know, are there locations near you? Or are they easy to access with a quick drive? Or do you prefer remote, remote customer service? And do you want to make sure that you can do an online chat with a maker at any time, or being able to send a secure message once you’re logged in or send a tweet, those kinds of services are not always a given. So it’s good to look into a banks offerings to make sure they have everything that is going to work for your lifestyle. And I’d also recommend researching the overdraft policies of whatever bank you’re going to go with, even if you don’t anticipate that you’ll need overdraft. You know, banks really vary in how they offer these policies. So some of them, they can charge an overdraft fee up to, you know, five, six times a day. So if you’re trying to pay for something, you could be racking up all these fees behind the scenes before you’re even made aware of it. And then there are banks that you know, they just stop any transaction that would result in an overdraft, or, or even if they charged an overdraft fee, maybe you can opt into just having them stop a transaction without charging you. So those kinds of policies are really good to just know about because those fees can get really expensive really quickly. So yeah, all that being said, you know, we evaluate a lot of these features on the bank reviews that we do on nerd Wallet. So, you know, we spend lots of man hours looking into what banks offer. And you know, we just know the kind of diversity that’s out there. And, you know, there’s just there’s a bank for everybody then to know two banks are the same.
Maggie Germano 14:08
Yeah, absolutely. And I think one of the most important points you made is that it really is an individual choice and based on you know, what you need and what makes the most sense for you. And I think that the overdraft piece has been talked about a little bit more recently, as certain banks are getting rid of overdraft fees. Because I mean, I’ve seen with clients but also with friends and family, getting overdraft fees can really really impact you financially whether you know, you obviously if you overdrafted you didn’t have much in your bank account to begin with and adding all those fees can be really harmful to a lot of people, especially someone who’s just trying to get through their day and or get to payday. So yeah, I think looking now that there are banks out there who are starting to kind of get rid of overdraft fees and figure out ways to be more customer friendly. That’s a really important one.
Chanelle Bessette 15:05
Yeah, definitely. overdraft fees tend to kick folks when they’re down. And so I hope as well that banks continue to remove overdraft fees or make it easy to make a transfer from another account to cover the difference in a transaction or something like that. Yeah, it’s definitely worth evaluating, though, to make sure if you do get in that situation that you’re not going to be in total trouble.
Maggie Germano 15:29
Yeah, agreed. Um, so I talked to a lot of my, like coaching clients and people that I’m just kind of speaking to, I talked to them about sort of, you know, what are ways you can set up structures with your money or, or structures with your banks to make it more likely that you’re actually going to save right? So saving is hard for many, many people. For most people, I’d say it’s very human to want to spend your money on fun things. And it’s, it can be difficult to kind of keep it in your bank account. But it’s also important to have money on hand for emergencies and things like that. So what are some kind of tips that you might give to someone to kind of leverage their bank account and their savings accounts, to encourage themselves or make it easier to actually save money?
Chanelle Bessette 16:19
Yeah, so something a lot of folks tend to do. And I used to do this myself. So I totally understand is that you think about saving after you’ve paid for everything else. And it’s a sort of at the end of the month, oh, whatever I have left is what I’m going to save. And what I find more effective. And I think a lot of people probably would, is to save first and pay yourself first and then use whatever is left to pay for your expenses for the month. So you know, clearly knowing how much how much is coming in and what you need for like your basic fixed expenses, you know, make sure that you have enough in your checking account for that. But if you set a certain amount to save every month, say I don’t know a few $100, then that can really add up over time. And a lot of employers make it easy to send out your money into much multiple accounts when you get paid. So if you work with your, your HR department or whoever manages your direct deposit, you can set up a couple of different accounts and say, hey, I want $200 Or you know, $500, however much you want to save, put it into my account when I get paid. And then everything else will die, it will default into into a checking account for you to spend as you would like. So that can make things a lot easier. And something that I personally do, because I don’t like to see my savings account, I don’t like to know, you know, it’s accessible, I like to keep it kind of put away from the rest of my money is I actually have my savings account of a completely different bank for my checking account. And that personally keeps keeps it separate enough so that I don’t feel tempted to tap it whenever I you know, have a surprise vacation coming up or I don’t know, if there’s like something that I really itching to buy that’s on sale, then it’s a lot easier for me to say like, No, it’s not, and it’s not my cash flow for the month, I’m just going to keep my saving separate. So those are. So that’s like one helpful tip that I highly recommend, I think it’s one of the most effective. But beyond that, there are some banks that have programs that help you round up your purchases and automatically save the difference. And that’s that can be really effective, you know, a few cents here and there, but over dozens of purchases a month can like really add up over time, I think that’s probably a good thing to do in addition to your regular savings and just kind of get in the habit of saving a little bit every day or every purchase. And then finally, you know, like I said, we’re in kind of a low interest rate environment for deposit accounts, meaning savings accounts are not giving you as much money back on your on interest as they have in the past. But as they start to bounce back and hopefully go up again, and then however long future that it takes. And that that difference of you know, half of 1% versus 1% can be a really huge difference in the long run, especially if you’re saving 1000s and 1000s of dollars. So that’s something to really consider, you know, as interest rates do start to bounce up again in the future.
Maggie Germano 19:21
Yeah, that’s really, really good advice. And I definitely echo you on the keeping your savings separate, especially an emergency fund keeping it separate from your checking, I’ve always told clients that too, because it’s so easy to just transfer it right back over into your checking when you know, your checking might go down a little bit. So that’s that’s really great advice too.
Chanelle Bessette 19:44
Right? Yeah. And that’s the thing is like those transfers usually do take like between one in three days if it’s between different banks. And usually that’s enough time for me to like pause and think, Okay, I don’t want to wait that long for this money. I probably don’t need the thing that I’m trying to transfer it for. So like, is he just enough of a little breathing room? To know that I should probably keep it in that savings account? Instead of transferring it?
Maggie Germano 20:07
Yeah, I’m with you there. Um, do you have any other tips and it doesn’t have to be banking related. But as far as it goes with saving, if someone listening is, you know, maybe they historically just have a hard time with saving, or they haven’t just done very much of that in their life, and they kind of want to be a little bit more robust with saving, what kind of tips do you have to sort of, you know, get started and having that habit.
Chanelle Bessette 20:35
So something that I came across in an article I wrote a while back is this idea of taking advantage of sub accounts. And that’s basically where a bank will break down a savings account or a checking account into smaller accounts below it. And you can often name those sub accounts something and so this is kind of like a psychological hack that I learned where if you name these sub accounts, what you’re planning to save that money towards, then it can be a really good visualization trick to figuring out, oh, you know, this cash is set aside for my friend’s bachelorette weekend in Cabo, or this is set aside for my new Tesla, or this is set aside for when I decide to go back to school and get my graduate degree or for house or, or even just an emergency fund, like you mentioned a moment ago, you know, having that visualization that this money is spoken for, it’s set aside for something that can be incredibly powerful. And if used effectively, then it can be a way to also budget just like set aside money and like know that, Oh, this $100 is set aside for this particular goal or that particular goal. And that’s something that I use as well, like, I think it’s really, really helpful. And for a lot of folks who are just getting started too.
Maggie Germano 21:55
Yeah, I agree. And like you said, it gives a name to the goal, instead of it just being this like big or small pot of money that can be kind of arbitrary, or you don’t really see the end results in it, nicknaming it like, like you said, Cabo trip, or house fund can make it more impactful when you’re about to transfer money out of it, and is like, I’m actually taking money away from this goal that I’m really excited about, rather than it just being like, I’m pulling this to do something fun with it’s like, no, you’re like actually potentially putting something more exciting at risk for for maybe the immediate gratification of something else.
Chanelle Bessette 22:38
Right, definitely. And, you know, there’s something to be said, with the sort of treat yourself mentality, like every once in a while allowing yourself a little bit of wiggle room to get something that you want. You know, there’s probably some psychological power in that as well, just letting yourself indulge a little bit in order to keep your eye on the prize in the long run. But you know, you also, if you’re budgeting for something, something big and expensive, it’s a lot easier to you know, like, keep that keep that goal in mind, and to not get off track through little superfluous, like purchases throughout the month.
Maggie Germano 23:16
Totally. And I’m, like you were saying about treating yourself and like being able to do fun things once in a while, because like, I think it’s completely necessary in order to enjoy life, enjoy your money, stay on track with other goals. Something that I’ve done to kind of keep myself on track with my budget, but also allow myself more of those treats, is to create a fun fund for myself, where it’s like, money is going in there every month, and I can literally pull from it for anything that I want. So if I’m like, I’m gonna go buy like a whole new outfit, or I like right now I want to get a exercise bike for at home. And so it’s like, well, if I bought a $300 exercise bike, that would probably blow my normal budget. But if I pull it from my fun fund that I haven’t been tapping into very much recently, then, like, it’s almost as if it’s free money, because I haven’t been touching it and I haven’t needed it. So that’s something that helps me still be able to splurge when I want to without putting anything else at risk.
Chanelle Bessette 24:20
Yeah, that’s an awesome idea. Honestly, I might steal that because it’s like, so great to have this pot of money that you can access that it’s just guilt free. You know, like, it’s just set aside for something fun. I love that especially. I don’t know, I feel like when times are tough, you know whether there’s a global pandemic going on or, you know, it’s just like generally stressful in your life. You just know that you can have this little resource that’s going to make you feel a little bit better.
Maggie Germano 24:46
Yeah, exactly. You don’t have to be always kind of scrimping and saving and thinking about the responsible things to do, you can allow yourself some of that that freedom. Right, right. So is there anything else you would like to share? With listeners, whether it’s about, you know, choosing a bank or utilizing your bank the most effectively or just saving in general.
Chanelle Bessette 25:10
Yes. So, you know, banking is incredibly personal money management is incredibly personal, something that works for, you know, a blogger you follow or a podcast or you follow, it doesn’t necessarily mean it’s going to work best for you. But that’s why it’s good to research and to figure out what you like what kind of resources and accessibility to banking that you personally need. You know, whether a really intuitive app means a lot to you, or maybe, maybe you’re you’re old school, and you just love to go into a branch and talk to a person face to face, then that’s great. But you know, just make sure that you’re picking a bank that has really great service. And the thing is to have that you don’t have to choose just one bank, like you can try a few different banks and see what works best for you. A lot of people probably don’t like to spread their attention that much. And then maybe just want to stick with one bank. But you know, it’s all up to you. And you can choose whatever you want to do, you can choose banks that have, you know, really great interest rates, just savings accounts, and you can put their savings there, but then choose another bank that has really great checking offerings with you know, purchase roundups, or great overdraft policy. So, it’s kind of a mix and match, choose your own adventure process. And, you know, it just takes time to figure out what you need and what you like. And, you know, so do your research, figure out what’s best for you and your lifestyle and your financial goals.
Maggie Germano 26:30
I love that. And I love you know, that reminder that you don’t have to be married to one bank, you can spread yourself out a little bit if you need to, based on your needs or your needs or you know, your goals. Yeah, definitely. Great. So how can folks follow you and keep track of the work that you’re creating?
Chanelle Bessette 26:53
Yeah, so and NerdWallet. In general, we publish articles on a really regular basis. And we have a great Instagram account, right Twitter account. And if you follow those, you’ll get a much more diverse range of content besides just banking. But for me, personally, I do have an author page on the NerdWallet website that lists everything that I have written. But I also am fairly active on Twitter, and I have a LinkedIn account. So if any listeners want to connect with me there, then that’d be great.
Maggie Germano 27:23
Wonderful, and I will link to that in the show notes. So folks have easy access to you. So thanks so much for taking the time to share your knowledge and expertise today. I really appreciate it.
Chanelle Bessette 27:35
Yeah, thank you, Maggie.
Maggie Germano 27:40
Thanks again for listening to the money circle podcast. If you want to learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog visit Maggiegermano.com. To get in touch with me directly email me at [email protected] You can also follow me on Instagram and Twitter @MaggieGermano. I look forward to hearing from you. Bye bye.
