Financial Independence: 5 Strategies to Reduce Reliance on Banks

Bounced checks. Confusing marketing. Unexplained fees. These issues and more contributed to a 5% increase in the number of complaints filed against banks last year by checking and savings account holders. Alas, many consider the woes of banking a necessary evil. But others are reacting by taking their money matters into their own hands. Case in point: One in 12 Americans doesn't have a bank account, a trend that experts say is on the rise. How do they do it?

1. Use a Prepaid Debit Card to Make Everyday Purchases

It's detached from any bank account, you can conveniently add or withdraw money from it at the ATM, and you can use it to make purchases, online and in person, wherever traditional debit cards are accepted. Perhaps now you see why prepaid debit cards have become so popular, particularly among Americans without banking accounts. Use your prepaid card like you would any debit card. It's ideal for everyday purchases. And in some cases, employers can deposit your wages to a prepaid card account.

Bonus: Since you can only spend up to the amount of money that's on the card, there's no risk of getting hit with an overdraft fee. You simply can't spend more than you've got loaded onto the card.

2. Pay Your Bills With Non-Bank Money Orders

When the prepaid debit card fails you, money orders offer the next best — and secure — means of bill payment. A money order lets you send money just like a personal check and typically costs less than a dollar per transaction. And, like a check, this prepaid payment method can be tracked and canceled if stolen. You can also receive funds via money order. And since it's prepaid, there's no need to have a checking account to use one.

3. Avoid Money Wiring Services

Simply put, it's expensive. The average fee for an incoming domestic wire at the 10 largest credit unions is almost $5, compared to $15 at banks — while outgoing domestic wire transfers cost more than $17, compared to about $26 at banks.

4. Sign Up for PayPal to Facilitate Peer-to-Peer Payments

Popular among those who have ditched the bank, PayPal allows its users to make quick and easy payments to businesses, colleagues, and friends through its online account system. PayPal also lets registered users opt for "bill me later," an option that delays payment — much like a credit card.

5. Get a Fire-Proof Safe

While you can load all of your funds onto prepaid debit cards, chances are that you're going to have some extra cash you'll want to stow away. Without a bank to keep watch over your hard-earned cash, you'll be smart to invest in a fire-proof safe. Install your safe in a secure location within your home. That means somewhere out of plain sight. Share the lock combination only with those who absolutely need to know it. And don't advertise how much money you keep inside of it.