Money Management Has Come a Long Way, Baby!

There are a wide variety of banking bells and whistles that make modern banking more convenient. Online banking. Mobile deposits. Even voice banking with Alexa! In fact, 63% of smartphone users have at least one money management app on their phone. Many more check their balances online or use budgeting software to track their spending habits.

Before we had banking at our fingertips, managing money was a bit trickier. So, what changed? Close your eyes for a second (we’ll wait…), breathe and let us take you back to the days of old.

Banking Begins

Lending and monetary exchange existed as early as 2000 B.C., and later in ancient Greek and Roman temples. Banking as we know it today originated closer to the 14th century, when the Medici family and other prominent locals opened lending institutions. FYI, the earliest known bank still in existence is also in Italy, so clearly they’ve got it going on there.

People saw the need to store and borrow money (#goals, right?) and soon the idea of a financial institution spread across Europe and into the Americas.

Birth of the Credit Union

The first American credit union opens: St. Mary's Cooperative Credit Association in Manchester, New Hampshire. By now, the big banks are rolling in dough and some people want more control over their money. They want to have more of a say, and get more back!

Credit unions work like a co-op: Members, not stakeholders, own the credit union. Because they’re not-for-profit organizations, they work hard to offer their members lower fees and better rates.

Enter the Debit Card

Credit cards have been around since the ‘50s. Debit cards came later, after consumers realized how convenient it is to simply swipe a piece of plastic to make a purchase. Before this time, it was CASH, CHECK or CHARGE. Cash was risky and impractical at times. Checks were time-consuming and risky for the business. And charge? Well, it was easy to overspend.

Debit cards helped people manage their money better because you can literally see the balance of your account go down with a purchase. You also can’t spend more than you have in your account.

The Rise of Online Banking

Stanford Federal Credit Union was the first banking institution to offer online banking (OLB) to its members. OLB was simple at first, with just basic access to your checking and/or savings accounts. Over time, more functions were added. And more credit unions jumped on the OLB bandwagon. Today, you can transfer money, pay bills, open accounts and even apply for some loans online!

A Picture is Worth 1,000... Dollars?

Before the “Check 21” act was passed, consumers had to sign and deposit a check in person to get the money. If the check was deposited/cashed at a bank other than the one the check was drawn on, the deposit bank would then pass the physical check on to the original bank. Whew, what a hassle for everyone.

The passing of Check 21 paved the way for mobile check deposit. Now, consumers can simply take a pic of the front and back of their check and deposit it with their credit union by mobile app. Oh, snap!

Back to the (Banking) Future

And there you have it! Money management has undergone a serious long term evolution from coins, clunky do-it-yourself logbooks and backroom lenders to banking online and completing transactions with a swipe. No wonder some people stashed dollar bills in their mattresses before modern credit unions!

Managing your money and staying on track isn’t the easiest part of adulting. But considering how far we’ve come since banking began, you’re off to a good start the moment you set up your first credit union account.

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.