New No Shit FDIC Survey: Single Mom Households Don’t Have Enough Money

I love when there’s a news story that’s not really news because most people the news story is about don’t consider the news story actual news because it’s just a day to day reality fact. This news story is all about the truly shocking fact that poor people are poor. Please pick your jaw up off the floor and continue reading.

The Federal Deposit Insurance Corporation released a new survey on Wednesday that tells us all what any single mom digging for quarters in her sofa cushions to buy milk all ready knows: single mom households don’t have enough money.

From The Huffington Post:

Nearly half of households headed up by a single mom don’t regularly use a bank account and rely on pricey alternative financial services, according to the surprising findings released by the Federal Deposit Insurance Corporation on Wednesday.

I’m not sure what our pals at Huffington Post find so “surprising” about this. The majority of one-parent families in this economy don’t usually have the extra cash to take part in a banking system, where a basic checking account costs more than $144 on average per year. $144 may not seem like a lot of money to some people, but to a single mother it can mean new winter coats and basic necessities for the school year for her kid, like pencils and paper. Most one-income families can’t afford to pay that amount for checks and fees.

When I was a single mother I didn’t have a bank account, and instead I relied on a check cashing store  with ridiculous service fees to use as my “bank.” These stores, usually found in poorer neighborhoods, can be used to cash checks, get advances on a check, or to send or receive money via Western Union. It’s how single moms get by. It’s how my out-of-town mom could send me money to buy diapers or food when I found myself struggling to get by as a single mom on a minimum wage salary and going to college part time. A bank account didn’t even register on my necessity radar.

Single moms, this is how we do. We use check cashing stores in bad parts of town. We wear threadbare sweaters so we can buy our kid or kids new sneakers. We coupon and eat a lot of bulk rice and potatoes and get real excited when we can afford super fancy stuff, like apples and hamburger on sale. I find it not surprising, but amusing and sad that there needs to be a survey conducted to show that poor women with kids don’t have money to spend on checking or savings accounts. Is there that much of a disconnect between poor people and not-so-poor people that the FDIC needs to conduct a survey that show us a single mom doesn’t feel she can afford a traditional bank account? Pro tip: a single mom also doesn’t feel like she can afford to save money for retirement or save money for a house or even save money to have in case of emergency. A lot of single mom families, sad to say, are just trying to have milk in the refrigerator.

(photo: Oleg GolovnevShutterstock)

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  • Chris Taylor

    Amen, I get so tired of “studies” like this. We single Moms are always being given advise on how to “fix” our “budget concerns” that don’t even apply. (like cut out unessessary purchases, I’m not sure whether they are reffering to groceries or rent, but that’s ’cause I am a simple-minded single mom *tounge in cheek*) I’m too poor to take myself to the dentist, because of back to school shopping. How about help fund a useful program or two instead of a study that tells us how poor we are? BTW I love your blog, it’s the only one that I read that consistantly seems to orbit the same reality that I orbit. :)

  • Jessica

    Just curious, but what’s the annual cost of the ‘ridiculous service fees’ at the cash store compared to the stated average $144 cost of a bank account?

    • Eve Vawter

      Oh word, the cash stores totally screw people, I think the fees they charge are crazy compared to a traditional bank and they totally take advantage of people in low economic demographics like single moms . You make an excellent point, but for someone who doesn’t have a bank account it’s sometimes the only option.

    • SCErRN

      But would it be cheaper to actually HAVE a bank account instead of paying check cashing fees?

    • Eve Vawter

      I think it would, depending on how often people used them. But then there’s the issue of a lot of people who use check cashing stores have less than perfect credit and these places are more lenient in regard to someone’s credit rating. Plus, they have better hours and offer different services than traditional banking institutions.

  • really

    I’m curious as to why women who are single and already have one child to raise on their own keep having more kids.

  • Monika Shimko

    A lot of check cashing places charge you a service fee on a sliding scale based on the amount the check is for. Just for an example, say you go to one with a $100 paycheck. They charge you $10, leaving you with only $90. That’s a 10% charge to cash a check. There are places that have that high of an interest, I’ve used them before. Ridiculous, yeah, but when your credit’s so bad because you have to pick and choose which bills to pay for this paycheck and which are gonna have to wait til the next, you get your car repo’d, you get evicted, or you’ve gotten bit in the ass from banks’ overdraft fees (honest to God, I’ve had to pay $700 in overdraft fees before) because you were too broke to pay the bills you wrote checks for, what are you supposed to do?

    To be fair, I use WalMart now. $3 charge per paycheck. Not a bad deal when I was making $10 an hour at 40+ hrs/wk; get a $700 paycheck and only pay $3? Sign my happy butt up!