Bedroom Banking
Avoiding debt collectors is hard enough. Avoiding unannounced bank withdrawals is a whole other issue. So, what do you do about it? Simple: bank at home!
I refer to this practice as bedroom banking. The best part is that the only elements you will need to start the First Local Bank of YOU is a safe or lock-box and an active checking account with a balance of $0.01 or higher.
Here’s how the process works:
- Take your paycheck and deposit it into your bank account. Make sure that the teller is aware that it is a paycheck and should be available for withdrawal immediately.
- Go straight to the ATM machine and withdrawal the entire paycheck in cash. If you have some money left over that is unable to come out of the machine, treat yourself to lunch.
- Place that money inside your cash vault or lock-box. Remember to keep a log sheet of all of the money that you place in along with the money that you take out in order to keep a balanced cash vault. Do audits of the vault on a weekly or bi-weekly basis. Also, remember to date everything.
The reason that your paycheck can become available immediately is because the bank understands that there is a very high chance that the funds will be in your employer’s payroll account to cover the “loan” that the bank gives you. Yes, when you deposit a paycheck that is drawn on a different bank, your bank gives you a loan as they are unable to immediately withdrawal the funds from your employer’s payroll account. Once the check clears, the bank keeps the money and thus the “loan” that was given to you is paid off.
But what should you do when you are given a personal check that is drawn on a different bank (you can cash checks regardless if they are drawn on your bank)?
- Take your check to the bank and deposit it. Ask the teller if he or she could give you an estimate on when the check will clear. Usually, it only takes a few days for most banks.
- If you have online banking, check your account status a few times per day. If you don’t have online banking, you can always head to the nearest ATM (any ATM is fine) and check your account balance for free.
- As soon as the check clears, withdrawal it immediately and follow the same procedures above for depositing it into your cash vault.
The only issue with this is that you really need to be on top of your bank account, checking it several times per day if necessary. If you can do this, you are golden.
This is the easiest way to keep people out of your bank account, especially if you have a civil judgement against you. They won’t be able to withdrawal funds that aren’t there, keeping your finances secure for the time being.
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