Dying With Money in Your Bank Account is a Bad Idea

Is there a word like easy money or should I call it free money? If you work at the bank, you will be shocked at how much money lay unmoved and unclaimed. When I say unclaimed, I mean money that have been in a bank account for over 10 years while they were not fixed. There are billions of dollars unclaimed around the world, and these money are money that the owners died without claiming. Interestingly, a lot of people actually cut corners just to save this money but at the end of the day decide not to spend it.

Why will you leave money in the bank?

Why do people keep money in the bank is one question that you will ask yourself seeing that the bank charge you for keeping money and pay you a very little interest that would not meet the inflation. A lot of people keep money in the bank because they want to feel safe, some do it because of unforeseen circumstances, and some just want to keep the money because they believe that spending money means losing money.

While a very large percentage of the world is literate, less than 30% of people understand the importance of saving, budgeting, investment, and debt. So many people are financial illiterate even though they learnt compound interest in school, but then this ends at the four walls of the school with no practical knowledge of what they have to do. The school hasn’t helped as a matter of fact. Teaching calculations but not how to make decisions.

Since so many people do not understand how finance works, then they decide to oversave so they can grow their wealth.

Oversaving and Overspending

You will admit that someone who is financially literate will not fall into one of this categories and this is because they do not know how to handle money. They either want to be rich by saving and being frugal or they want to show their affluence by spending beyond their capability and leading to unwanted debt at the end of the day.
It is understandable if this was a problem of undeveloped and developing countries but rather, this is always very common in the US. Over 38% of people in the United State are in credit card debt and over 30% of the population do not have savings. How would you save when you are in debt?

Does Going Back to the Board Solve this Problem?

Not everyone can go back to school to learn about financial literacy but it is important that financial education is implemented in schools. A repeat of the Covid-19 pandemic where people could not work and pays were not made leaving people broke could leave the entire world broken. Including financial literacy in school curriculum would help the build the generations coming on how to live financially free, how to use debt and understand interest, how to budget and how to invest.

Earn, Invest, Save, Spend, and Do it Again

This is the rewashing formulae when you are coming into the world of finance without debt. This will help you stay out of debt specifically. When living with no debt, it is important that you live below your means but when you are in debt, is advisable to pay off your debt first and then start to live a financially free live. Remember to rewash your method and do not invest where your mouth isn’t.

I am not saying you cannot get into debt but if you do not know how to use debt, then do not get into it. When you are able to borrow money and pay back very early, it increases your credit score which is needed to do a lot of things in so many countries. It could be used when giving out a job or used when giving out a house. The important thing is being able to use it to your advantage and not getting into high interest debt.

How Much do you need to Retire well?

Someone will say that $1 million is enough to retire early but in a world where there are more and more millionaire daily with increased inflation, I really worry about what a million dollar would do. In other to retire early and financially free, it is advisable to start investing early, identify your short term and long term goals, be able to understand your investment portfolio and be able to.