Some people are of the opinion that if they have a dollar in their pocket they should spend it. In the old days, people talked about money “burning a hole in their pockets.” So this isn’t a new problem. And then there are all the ATMs that let you get at your cash for a very small fee whenever you feel the urge to splurge. While ATMs may be convenient, they’re also deadly.
Once upon a time there were a few, then we demanded more. Banks discovered that ATMs are way cheaper than bodies, and that they could eliminate the bodies completely in some places. Branches closed and were replaced by machines. According to the Canadian Banking Association we did almost 981 million transactions at ATMs in 2008. Wow!
The world’s first banking machine was installed in a branch of Barclays in Enfield, north London, in 1967. ATMs arrived in Canada at the end of 1969 and were called “24-hour cash dispensers.” In a little over 40 years, they’ve become synonymous with “convenience.” In fact, the CBA says, “ABMs are the primary means of banking for 34 per cent of Canadians.”
The U.S. was the country with the most cash machines—405,000—in use at the end of 2006. By comparison, Canada had 16,190 machines spitting out cash.
Since we don’t have to wait for the branch to open to get our money, and since we don’t even have to go to our own bank machine—we can get at our money everywhere from our local corner store to the gas station to the casino—we’re putting more money into our pockets to burn that proverbial hole.
Worse still, we’re paying record fees to do so. In the mid-1990s we shelled out about a buck a transaction. Now we’re up to $4 or more for a single ATM transaction. And if we use one of those private cash dispensers, we can spend up to $6 according to the Financial Consumer Agency of Canada.
Whether you’re willing to accept this fact or not, here’s the truth: If you’re paying ATM fees you’re either lazy or stupid. Pay a $3 fee to take $20 out of a machine and you’ve just paid a 15% fee!
It doesn’t take a genius to figure out how much cash you’re going to need for a month (or even per pay). It doesn’t require brilliance to know that using your own bank’s machine is the most cost-effective way to do it. For goodness sake, plan ahead, and stop refueling the fire that’s burning a hole in your budget.