What I Learned From Working in Personal Banking

Before I became a stay-at-home, homeschooling, earning-income-from-home mom, I held a variety of jobs.

I worked at Burger King, waitressed at an ice cream shop (and a bar in a small town, but that’s a whole other post), earned my cosmetologist’s license, worked retail at department stores, and did accounting for an electronics store.

But my main “career” before my current career was in personal banking and mortgage.

I started out as a teller, then moved to Teller Supervisor, went on to Personal Banker, both in the bank branch and in the phone center, and from there I transitioned into the position of sales assistant for a highly successful mortgage rep, before being laid off in a mass layoff at the end of 2003 as the mortgage bubble started to deflate.

All of my jobs taught me things about life, but I have to say that it was my career in banking that taught me the most about people and how they deal with money (I know: duh!).

Yes, it took me nearly 10 years AFTER being laid off to really put what I learned into action for our family, but that too is a whole other post for another day.

So I thought I’d share with ya’ll today some of the things I learned from the people I worked with in those 15 years.

Most people have no clue about the true difference between a need and a want

Probably the greatest thing about being a personal banker in a phone center opposed to in the actual bank is that we could wear jeans and sit around making “you’re KIDDING me” faces at customers who never had a clue that we were dissing them.

I remember a guy calling in for a loan for furniture one time that caused me to make such a face.

He had just purchased a new construction house, and when we finished the loan app and credit check (you truly can have your answer within 2 minutes of completing the application), we denied him his furniture loan because of a high DTI and scattered late payments.

The late 20-something man was truly distraught.  “What am I gonna do now?” he yelled into the phone.  “We just bought this big house, and we NEED furniture for it!  We can’t just keep our old stuff!”  

Umm, yes, you can keep your old stuff.  Really, you can.  The world won’t end because you don’t have new furniture, and honestly, no one really gives a crap how cool your furniture is.

It is absolutely amazing the way we have become accustomed to new and shiny stuff. No judging here: I’ve been there, done that. That’s how we got ourselves into over $60k of consumer debt at one point.

But now that we’re free from the hamster wheel of life and I’m on the outside looking in, I get seriously amazed at how we are duped into thinking we NEED to have the biggest and best of everything.

Older doesn’t necessarily mean wiser

One of the last couples I worked with before I was laid off was a couple in their mid-50’s who had decided (finally) that they had probably better start thinking about a plan for retirement.

This couple had a house worth about $450k, income in the range of $150k, credit card debt of roughly $100k, and a $300k balance on their home mortgage.

We eventually did work out a plan for them to refinance and tap some of the equity in their home to pay off at least some of the CC debt, but I often wonder if they ever were able to retire.

The percentage of those “who get it” regarding debt is extremely low

I’d say regarding the thousands of consumers I worked with, probably 90% of them were in a complete financial mess, similar to what we are today.  It was rare for us to see a credit score over 700.

Most credit reports that we handled were scattered with late payments and high credit card balances, and savings accounts were largely non-existent.  And we know by today’s numbers that this trend to live for today is only getting bigger.

Financial irresponsibility stretches across all races, income classes, and any other boundary you can think of

The financially-messed-up people that called in for loans and/or mortgages were from all walks of life.  Working at a call-in phone center for a major bank in a major metropolitan area, we served everyone, from the middle-class, to the gangsta who hadn’t worked a day in his life but thought that we should give him money anyway, to local and national celebrities.

There really wasn’t much difference in the ratio of the financially irresponsible/responsible no matter what their income and/or living situation was.

Appearances mean nothing

People have this illusion that those living in fancy houses, driving expensive cars, taking costly vacations, etc., have a great financial situation.  But like Tom Stanley proves in The Millionaire Next Door (affiliate link), that’s not often the case.

In our former house in a spendy suburb, we would walk the neighborhoods and my husband would often feel like a failure as a provider because he couldn’t afford a bigger McMansion, a large boat in the driveway or a $50k SUV.

He figured that all of the houses we walked by with those toys were owned by people with lots of cash.

But what I learned in my 15 years of working with them is that they’re likely in huge debt and on the verge of an emotional breakdown due to trying to manage their debt.

The percentage of those I came across who really understood the value of mananging money correctly was likely less than 1%.  There’s one guy in particular who I’ll never forget.  His name was Mike, and he was 40 years old, making 500k a year.

He and his wife (along with their kids – 4 of them if I remember correctly) had recently built their dream cabin, and were now calling in to get a mortgage for their dream home.  I don’t remember exactly how much they were spending on the house, but it was a lot.  Somewhere between $500k and a million.

But the difference was that they had paid off the cabin in a couple of years, were going to pay off the house in 5, had absolutely no other debt and an abundance of savings.

I remember asking him “Do you have to be away from your family a lot to make that kind of money? (He was in sales).  “I did at first” he said, “but I managed my career in a way so that now I pretty much work just my 40 hours a week so I can be with my family” (he had worked in sales, and had hired a good sales team under him that he now managed).

I don’t think I’ll ever forget that guy.  He was one of the only people I encountered who truly understood the importance of spending your money on things that are of the utmost value to you.

We are only 4 months into our journey to debt free.  The road is S-L-O-W going, and by the numbers, we’ve hardly paid off any of our debt at all.  But I think that what people often don’t understand is that you don’t have to reach debt free to start experiencing that financial peace.

Financial peace begins when you make a decision to manage your money in a way that fits in with what’s most important to you and your family.

It begins when you choose to stop wasting your money on stupid crap and make a plan to achieve a better financial life – a plan that fits in with what you truly desire in life instead of what feels good at the moment.

Why not make today the day that you start on your road to financial peace?

 

28 comments

  1. Good post Laurie and thanks so much for the mention! I had the “pleasure” or working in a bank for about a year right after Nicole and I were married, plus my experience in the brokerage industry and I saw a lot of this same stuff as well. It’s crazy how some view money and how many just don’t get it as you said. Sadly, I too used to be one of those but am thankful that I finally woke up.

    • Laurie says:

      Same here, John. You would’ve thought that all those years of working in the industry would’ve kept me from making the financial mistakes I made, but like you, I’m just glad to have finally woken up. 🙂

  2. I think you hit the nail on the head. People do tend to think their neighbors or friends are doing better than them and so they try to compete. The problem (as you stated) is that most of the time it is an illusion, a debt sponsored lifestyle.

    I stopped comparing myself with others a few years ago and I am much happier for it.

  3. Great job on starting your journey. You have to start somewhere, right? And I can see how you could have some financial peace just from knowing that you’re starting to make progress.

    And I agree, most people suck at money. I know broke people at all income levels.

  4. I learned the most when I was a mortgage collection specialist for a large mortgage servicing company. I didn’t know much about mortgages before that, but I learned a lot. I also learned how to track people down when they didn’t pay their bills. Most would be amazed at what extent people go to in order to not pay their mortgages.

    • Laurie says:

      LOL, I bet collections was a whole new learning experience, Grayson. You could probably write a post on that someday. 🙂

  5. I don’t think I would ever want to work in a bank because of how much I would look down on the general public. Sometimes I overhear other conversations in the other cubes when I go the bank (and that is rare), and the things they ask for are ridiculous. Then there are the times someone tries to sell me policies and products that I simply don’t need or can out-wit them on. I know there are good bankers out there, but there also seem to be A LOT of bad ones. Thanks for sharing your stories!

    • Laurie says:

      Oh yes, it’s often about the sales these days, isn’t it. Even when I was in banking, you had a quota as to how many products you could sell over and above what the customer came in looking for. Terrible!

  6. Excellent post Laurie and I agree with this statement completely: “Financial peace begins when you make a decision to manage your money in a way that fits in with what’s most important to you and your family. ”

    I have noticed that through all this my thoughts on money are beginning to change. For example, yesterday we drove by a new neighbourhood that was full of million dollar homes and one in particular really stood out. It is valued at 9 million and looks beautiful from the outside. We kept saying that we wondered what those people did to earn that much money. Later in the day I thought I wonder how much of that house they really own and how much the bank really owns. Maybe they are like Mike, the man you mentioned above, and have it all under control. Or maybe they are just scrapping by, like many of the other people you dealt with.

    • Laurie says:

      SO true, Sicorra – we just never know about their situation, do we? I would hate to have a multi-million dollar mortgage over my head.

  7. Matt Becker says:

    “Financial peace begins when you make a decision to manage your money in a way that fits in with what’s most important to you and your family”. You have a way of saying something every time that really resonates. I agree whole-heartedly that you don’t have to be rich, or as you say, even completely debt free. What’s important is that you’ve taken control and you’re on a path that you’ve determined. Great post.

    • Laurie says:

      Thanks, Matt. :-). We have learned so much since starting on our journey to take control of our finances. I think I learn something new every day.

  8. Great post, Laurie! It is really eye-opening working in the financial industry isn’t it? People are so good at wearing masks, but many people who outwardly look like they have it together, do not. Unfortunately, today people seem more interested in appearing wealthy than actually be wealthy! It’s a mindset we need to change. And yes, there is incredible peace to understanding your financial health, even when it’s not perfect, but knowing you’re taking the right steps to bring it back to good health.

    • Laurie says:

      That’s a good way to put it, Shannon! They want to appear wealthy more than actually be wealthy. I’ll take door number two, thank you very much.

  9. Laurie says:

    Hi Cami! I’m so glad you enjoyed it. Yes, we’ve found that even though we are a long way from debt free, our peace has increased LOTS. 🙂

  10. Mackenzie says:

    Love this: “you don’t have to reach debt free, to start experiencing financial peace”. Isn’t that the truth? 🙂 Great post Laurie!

    • Laurie says:

      It’s so true, you’re right. I hope many, many more people take the chance on following a financial plan and finding out for themselves. Thanks for the comment, Mackenzie 🙂

  11. I always enjoy hearing about people’s careers, and what an insightful one working in banking. I’m not surprised at all with how most people don’t understand the difference between wants and needs, but wow, $100K in credit card debt? How does that happen? I often think the higher your income, the more you feel like you have to spend, and the more the world expects you to spend. I’m thankful for the PF community because they don’t share that attitude.

    • Laurie says:

      You’re so right Kim. With the PF community, I finally feel “normal”. When we lived in the ‘burbs and tried to be frugal, I felt so out of place. Not that this applies to the burbs exclusively, but you get my drift. It’s just nice now to be in communication with others who share our desire to be debt free.

  12. Mr. 1500 says:

    Wow, the state of people’s finances is something that I think about all the time. When I walk my kid to school and see all the parents pull up in 50K or 100K cars, I wish that they had a little bubble over their heads which stated their income and debt. It really fascinates me, so it’s cool (and quite depressing!) to read about your experience.

    They probably think I’m the poor one, wearing my old t-shirts and patched up jeans.

    • Laurie says:

      Oh, little do they know, Mr. 1500. The day will come soon when you can spend as much time at school with your little ones as you want, like Johnny Moneyseed wrote about recently, while they’re struggling to get dinner on the table. 🙁

  13. I sooo agree on many of these points.. and I have to say that I´m so glad that I´ve discovered the world of personal finance at a young age, before getting into the “adult world” with mortgage and all that comes along. This way I know that I´m going to be prepared on every angle before entering the next step!

    • Laurie says:

      Yes, you are very lucky that you learned early and avoided so many of the mistakes so many people (me included) have made.

  14. Laurie says:

    You’re very lucky, and one of the few, Troy, that had parents that taught good money lessons. It’s not very common, either back then or now. Thanks for the comment. 🙂

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