Every year, thousands of money nerds such as myself descend on a new city to attend FinCon, my favorite financial services / money / media conference. It’s always a great time, and we come away from the experience refreshed and ready to make a difference in the lives of our clients and those who read our blogs.
This year, however, my FinCon experience included an extra-special opportunity: a day-long workshop called FinX: Connecting to the Consumer Financial Experience, put on by the Center for Financial Services Innovation.
The FinX website describes the workshop as follows: “Cashing checks, obtaining a payday loan, loading a prepaid card, and making minute-by-minute cost-versus-time trade-offs. FinX facilitates an immersive experience for participants, complete with real-life challenges and up-to-the-minute scenarios that unfold as the day goes on.”
To be honest, I originally signed up because I love anything resembling a scavenger hunt (no joke, ask me about the University of Chicago Scav Hunt sometime). While I also expected to learn something, I really wasn’t sure what the FinX experience would bring.
What I walked away with was a newfound respect and appreciation for just how difficult it is to step into the shoes of what the financial services industry calls an “unbanked individual”, someone who feels like they don’t have enough money for—or aren’t welcome in—the traditional banking system. Put more bluntly: being poor is as expensive as it is stressful.
To be clear, part of me knew this already. I’ve long since heard about the issues with predatory lending and high transaction costs that people in low-income and unbanked scenarios face, but for the first time, I got a tiny sliver of this experience firsthand. Even these fleeting experiences in a workshop scenario were life-changing.
On the day of the FinX event, each team was given a set of tasks, a payroll check, and a personal check, with the following context: “Today is payday and you have to pay your bills and complete errands before your next work shift starts. You have received a payroll check from one of your part-time jobs and a personal check from less formal employment. Convert those checks and take care of some everyday expenses. Execute as many activities as possible.”
Some of the tasks were to:
- Cash the payroll check from your primary part-time job.
- Buy a general purpose reloadable (GPR) card and put $10 on it.
- At a different location, reload the GPR card with at least $10.
- Complete a money transfer for $30 to your sister to help with expenses for your niece’s upcoming birthday party.
- Pick up the $30 money transfer at a separate location within the city.
- Inquire about a $500 loan from a financial institution.
- Find a no fee / no overdraft checking account with free checks so you can keep a record of rent payments.
- Visit a pawnshop and inquire about how much money could be exchanged for a team member’s watch or jewelry.
- Purchase a money order for $20 to pay a monthly bill that’s due today.
- Buy groceries for your family, spending no more than $10 including tax.
There were plenty more activities than that, even, and only 2 hours to complete the challenge… still way more time than the average employee would have for their lunch break!
So our team, comprised of two other women and I, were sent off into a predominantly-Latinx part of Dallas just south of the Bishop Arts District.
For the record, we took an Uber there (already a luxury) and used our smart phones to plan an optimal route to complete the tasks. In addition, I fully recognize that what we participants saw as an “interactive, immersive experience” involved visiting a community to which we were not invited—privilege at its finest.
The Costs of Doing Business—Both Financial and Emotional
Our first stop was PLS Check Cashing on Jefferson Blvd. There, we could buy the GPR card, purchase a money order, initiate a $30 transfer, and cash both the personal and payroll checks. While the initial one-stop-shop experience was certainly convenient, the fees and emotional labor required were not.
For starters, we paid:
- $1.70 to cash a $70 payroll check
- $1.15 to cash a $15 personal check
- $6.95 to purchase a general purpose reloadable card (which doesn’t even include the $1/debit and $1.50/credit transaction fees that came later!)
- $5 to send a $30 money transfer