by It is nigh-on impossible to manage your finances in the modern world without interacting with a variety of companies. From the bank that provides your current account to the company that you have insurance policies with, your finances will almost invariably involve at least one other party.
Over time, most of us become accustomed to dealing with these companies. The longer we bank with a particular institution or renew a policy with our usual agent, the stronger the bond between us and the company. This is a bond that the companies all seek to insist upon also, with friendly emails, offers, and various “perks” designed to keep loyal customers happy.
However, these companies are not kind, benevolent, and caring— though it’s easy to forget that. If you are truly going to master your personal finances, then you need to cultivate a relationship with financial institutions that is all of the following…
Suspicious
Banks, mortgage companies, health and disability insurance providers, loan providers… their sole purpose for interacting with you is to make money. That means they should be treated with a degree of suspicion, even when they are being perfectly pleasant. Financial management can only be truly achieved if you are suspicious of everything a financial company says and does; take nothing as read, and always ask for proof of any claims. This might sound excessive, but if something does go wrong, you’ll be glad you were diligent.
Unreliable
In the modern world, we expect financial institutions and companies to operate as they should. If you go to use your ATM card, you expect it work; if you have to make a claim on your disability insurance, you expect the policy to be honored. Sadly, this is not always the case. There are countless examples of people finding that their accounts have been frozen — online processor PayPal are particularly notorious for it — or an insurance policy claim is denied. Sadly, there is very little you can do about this, except to try and ensure you always have a backup plan in place.
Unemotional
If you try to cancel a product with a financial institution, chances are they will try to play to your emotions to persuade you to stay— it’s a key part of their retention strategy. It’s important not to let this happen, because financial institutions can be incredibly cruel when they want to be. Companies like Mutual of Omaha can choose not to pay out on long-held illness policies, meaning that clients have to contact a disability law practice to try and win what they are entitled to; while there are numerous stories of major banks damaging the financial outlook of people without being overly concerned about the damage they have caused.
Keep these cases in mind and always approach your relationship with your bank with cool, unemotional detachment. If it makes financial sense for you to walk away from an institution, then walk away without a backward glance.
In conclusion
Financial institutions are useful, but your relationship with them should always feature the above three factors. If you focus on maintaining the above, then you’ll be free to move from provider to provider as you see fit, and at least be prepared for the likelihood of problems arising, so you can always ensure you have a backup plan in place.
