| Terry Rigg is the editor of the Budget Stretcher Newsletter. The
Budget Stretcher Newsletter is published monthly and is loaded with
information that will save you time and money everyday. Go to
http://www.homemoneyhelp.com for more information. |
Checking
accounts are an absolute necessity these days. You can either have a
checking account or run to the bank or other outlet for money
orders. Many people pay for almost everything with a check including
groceries, gas, clothes and a long list of other things. When you
add an ATM card to this picture, your chances for a potential
problem is greatly enhanced.
Don't get me wrong. There are many
people that can keep their checkbook up to date, even deducting all
of the ATM advances and automatic withdrawals as they make them.
However, too many people that write checks for everything wind up
not entering a check when it is written or an ATM advance when it is
made. The result is a bounced check fee of up to $25 for the bank
and god only knows what the store where you wrote the check could
charge you.
It seems
like carrying cash to pay for things isn't the "IN" thing
to do. When I'm in the check out line, most people are paying with a
credit card, debit card, or check. I realize that carrying cash has
its risks. You could lose it or have it stolen. What are the risks
when paying by check? There are absolutely none if you enter each
check and properly deduct the amount from your account. However, I
have counseled people that have as much as $100 per month in
overdraft fees. This isn't just for one month. This is an average
over a six month period. That is a lot of money that these people
couldn't afford.
What's the best way to handle my
checking account?
If you don't have problems keeping up
with your checking account, keep doing what you are doing.
If you occasionally have bounced
checks, I recommend that you use your checking account only to pay
your monthly bills and use cash for everything else. If you have an
ATM card, destroy it.
With that said, I know you will
probably not quit writing checks or destroy your ATM card. So let's
look at what you need to do to keep up with your checking account.
Determine exactly how much money you
have in your account even if you have to go to the bank for help.
Enter that information on a new page
in your check register.
 Enter
the date, your check number, payee and amount in your check register
when you write the check. Don't worry about the people in line
behind you. This will only take a few seconds. If you like, you can
deduct the amount of the check when you get home.
Take your checkbook with you when you
use the ATM and enter your withdrawal while you are still at the
machine.
Develop a system to deduct automatic
withdrawals. It is probably best to deduct these on the first of
each month.
Add any deposits as you make them.
You need to find out how much and when direct deposits should be
entered in your check register.
When you receive your bank statement,
reconcile it as soon as possible. If you find any discrepancies
check them out immediately. Don't give up until you are sure you
have resolved the problem. The balance you show in your check
register should match the bank, less any bank charges.
When you reconcile your bank
statement be sure to clearly mark the checks that have been returned
to you. One of the biggest problems people have with overdrafts is
missing a check that is taking a long time clearing the bank. Go
back at least a month to make sure all previous check have cleared.
Having problems with your
checking account, as with all other money problems, is a matter of discipline. It can cost you
a lot of money by not applying that discipline to managing your
checking account.
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