How Amish communities handle money, banking, and finances

Published on January 4, 2026 at 4:00 PM

The Amish approach to money, banking, and finances is a paradoxical blend of 18th-century tradition and savvy 21st-century business sense. While they avoid many modern financial instruments, they are often exceptionally successful in business due to their low overhead, high work ethic, and communal safety nets. For the Amish, money is not a tool for personal status or luxury; it is a resource to be stewarded for the survival of the family and the preservation of the church.

How Amish communities handle money, banking, and finances — How Amish communities handle money (image: Abpray)

The Amish financial system is built on a foundation of non-conformity. Because they believe in being “in the world, but not of it,” they have developed a parallel economy that prioritizes stability over growth and community over individual wealth.

Table of Contents

1. The role of bartering and the “cash” economy

Bartering is common but is rarely the only way the Amish operate. Instead, they utilize a sophisticated “informal labor economy.”

Labor Exchange: A neighbor may help with a barn raising today with the understanding that the other will provide help with the harvest next month. No money changes hands, but the “debt” is meticulously tracked through social memory. This internal economy reduces the need for circulating currency and keeps resources within the district.
Cash for Privacy: Cash is the preferred medium for daily transactions. It is immediate, simple, and leaves no digital footprint. Many Amish businesses, such as roadside produce stands or quilt shops, operate on a “cash-only” basis, which reinforces their desire for a simple life and limits their reliance on external financial tracking.

2. Banking and interaction with the “English” system

Contrary to popular belief, the Amish do use modern banks. They maintain checking and savings accounts and are known by local bankers as excellent credit risks.

Practical Checking: They use checks to pay bills and handle larger transactions that cash cannot comfortably cover.
Avoiding Credit Cards: While they use checks, many Amish avoid credit cards to prevent the temptation of impulsive spending and to avoid paying high-interest rates, which they view as usurious and spiritually harmful.
No Social Security: The Amish do not participate in Social Security. They reached a legal agreement with the U.S. government in 1965 (Internal Revenue Code Section 1402(g)) to be exempt from paying into it and receiving benefits from it. They view such insurance as a lack of faith in God and the community’s obligation to care for its elderly and disabled.

3. Communal lending: the Amish “internal bank”

When a young couple needs to buy a farm—which in Lancaster County, PA, can cost upwards of $1,000,000—they rarely go to a traditional bank for a mortgage. Instead, they turn to communal lending.

Church Loans: Many church districts have an internal fund. Members contribute to this pool of capital, which is then lent to young families at very low or even zero interest.
Trust vs. Collateral: There is rarely a mountain of legal paperwork. The “collateral” is the member’s standing in the church. If someone defaults, the community works with them to find a way to pay it back through labor or restructured terms. This system prevents the foreclosures that are common in the secular world.

4. Avoiding debt and interest: a cultural imperative

The Amish have a deep-seated cultural and religious aversion to debt. They take the biblical proverb seriously: “The borrower is servant to the lender.”

Practical Frugality: If an Amish family cannot afford a piece of equipment, they wait until they have saved the cash or they build it themselves. This prevents the “debt cycle” that plagues many modern farms.
Interest (Usury): High-interest debt is seen as predatory. By lending to each other at low rates, they keep wealth within the community rather than letting it “leak” out to secular banking institutions. This practice ensures that the wealth generated by Amish labor stays within Amish hands.

5. Insurance: the “Amish Aid” system

The Amish generally do not buy commercial insurance (life, health, or property). Instead, they practice a form of mutual aid that is far more efficient than any private plan.

Amish Aid Plans: Members pay into a congregational fund. If a barn burns down or someone faces a massive hospital bill, the church covers the cost entirely through a special collection or the central fund.
The “Frolic”: If a disaster is physical, the “payout” isn’t just money; it’s 200 men showing up for a “barn-raising frolic” to rebuild the structure in a single day. This reduces the cost of rebuilding to almost zero for labor.

6. Taxes: fact vs. fiction

A common misconception is that the Amish do not pay taxes. In reality, they are diligent taxpayers in almost every category except Social Security.

Income and Property Tax: The Amish pay federal and state income taxes, property taxes, sales taxes, and public school taxes (even though they do not use the public school system).
Corporate Tax: Amish-owned businesses are subject to the same tax regulations as any other American business. Their reputation for being “tax-free” is a myth; they simply do not participate in the specific government-sponsored insurance programs.

7. The shift to small business and entrepreneurship

Because farmland is becoming scarce and expensive, many Amish have shifted from farming to small businesses like carpentry, furniture making, and manufacturing. This transition has forced a more complex understanding of finances.

Resource Management: Amish entrepreneurs are masters of resource management, often repurposing old materials or using pneumatic (air-powered) tools to avoid the grid.
Economic Resilience: Because their businesses are often family-run with no debt, they can survive economic downturns much better than “English” businesses that carry heavy loans.

Comparison: Amish vs. modern financial models

Feature	Amish System	Modern “English” System
Old Age Support	Family and Church (Exempt from SS)	Social Security and 401(k) / IRAs
Insurance	Mutual Aid / Communal Responsibility	Monthly Premiums / Private Companies
Lending	Interest-free or Low-interest Church Loans	High-interest Bank Mortgages / Credit
Wealth Usage	Buying more land for the next generation	Personal consumption and lifestyle
Business Model	Debt-free, low-overhead, family labor	Leveraged, growth-focused, hired labor

Conclusion

The financial success of the Amish is not a secret; it is the result of extreme frugality and massive communal leverage. By avoiding the “interest trap” of modern society and refusing to rely on government safety nets, they have created a resilient, self-sustaining economy. Their approach to money, banking, and finances centers on the idea that wealth belongs to the community and God, not just the individual.

Their unique perspective offers valuable lessons in sustainable living and financial independence. By prioritizing the collective over the individual, they ensure that no member falls into poverty, and the heritage of the farm and faith is passed down to the next generation debt-free and spiritually intact.