checkbook http://www.wisebread.com/taxonomy/term/1412/all en-US Why I Still Write Paper Checks http://www.wisebread.com/why-i-still-write-paper-checks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-i-still-write-paper-checks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2204277278_cbf43f4146_z.jpg" alt="writing check" title="writing check" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>I know plenty of people who write essentially no paper checks any more. I know students who pay everything with debit cards. Others manage their financial lives with electronic payments. I do neither. I get by with a mix of <a href="http://www.wisebread.com/carry-some-cash">cash</a>, credit cards, and paper checks.</p> <p>Now it's really just a matter of inertia. I used to have some reasons for doing things this way, but they've all been superseded by events:</p> <h2>Float</h2> <p>It used to be that writing checks produced float &mdash; the time between you handing over your check and your bank debiting your account. Back in the early 1980s, when interest rates spiked up over 14% and paper checks had to be flown back and forth across the country to be presented at your bank for payment, float was a big deal. (See also: <a title="Avoid Bank Fees" href="http://www.wisebread.com/avoid-bank-fees">Avoid Bank Fees</a>)</p> <p>Even for ordinary people it could be a big deal. Let's say your mortgage payment was $1,000. If you had your mortgage at an east-coast bank and you paid it with a check drawn on your west-coast money market fund, it could easily take five business days for your check to clear. At 14%, you'd be earning 38 cents a day, so the float could make you $1.92 (even $2.68 when the weekend lined up right and you got seven days of float). That's $2 a month of free money, just from the float on one bill! Multiplied across all your bills and twelve months a year, float could easily add up to $100 a year.</p> <p>For businesses, it was a much bigger deal. If could increase your float by one day, you could add $140,000 straight to your bottom line for each $1 million worth of payments you made per day. There were consulting firms to help you locate the right bank for your checking account (that is, the bank that was most remote from whoever you made payments to).</p> <p>Nowadays, of course, it makes little difference. Between <a href="http://en.wikipedia.org/wiki/Check_21_Act">Check 21</a> and the various kinds of <a href="http://en.wikipedia.org/wiki/Automated_Clearing_House">Automated Clearing House</a>&nbsp;(ACH) check truncation, checks usually clear almost immediately. You're lucky to get two days of float. Plus, interest rates are near zero, so there's really no point.</p> <h2>Security</h2> <p>There was a time, long ago, when the only way to get money out of a checking account was to present a check for payment. Even the account holder did it that way: He came in to the bank with a check made out to &quot;Cash&quot; and presented it for payment.</p> <p>Those were the good ol' days. The only way a thief could steal money from your account was to forge a check &mdash; either modify a real check or else print checks with your account number and then forge your signature on them. Checks were printed on &quot;safety paper&quot; to make such forgeries more difficult to do and easier to detect.</p> <p>You got the actual paper check returned to you after the bank had paid it &mdash; with the word &quot;Paid&quot; stamped across the front. That served as proof of payment. If the check was a forgery, you had the evidence. (It was also kind of interesting, because you could see all the endorsements on the back. You could tell if someone had just deposited the check into their own account or signed it over to someone else. You could also see all the banks it had passed through on its way to your bank.)</p> <p>For a time, when ACH debits were just starting to take off, I made a point of never authorizing an automatic debit to my account. I figured it would make it easier to deal with a theft of that sort &mdash; I wouldn't have to argue about whether a particular transaction was or was not authorized, because I could just make a blanket statement: No automatic debits were authorized.</p> <p>Nowadays, of course, practically every transaction that hits your checking account is an automatic debit of some sort &mdash; even the ones that you initiate by writing a paper check. There's no way to prevent it; if you could, it would just make your checking account worthless.</p> <h2>Errors, and Fixing Them</h2> <p>I was actually an early adopter of electronic banking back in the early 1980s. There wasn't an &quot;automated clearing house&quot; in those days. Any kind of automated payment needed to be negotiated individually by your bank and whoever you were trying to pay. The same was true of direct deposits.</p> <p>I ran into a number of errors in those days, including a direct deposit failure that delayed my paycheck for several days. My roommate at the time had a mortgage payment go similarly astray, causing more than a little stress. Perhaps it was a reaction to those early errors that prompted me to just stick with paper checks.</p> <p>Nowadays the automatic systems are probably more reliable than the paper systems, and there are actually pretty good rules to protect you from errors and unauthorized transactions (although only if you <a href="http://www.wisebread.com/check-your-statements ">check your statement</a> and tell the bank if there are any).</p> <h2>I'm Not the Only Luddite</h2> <p>I suppose there are plenty of other people who still write paper checks out of simple inertia. But there's one group that has a real financial interest in paper checks: the companies that print checks. One of them, Deluxe Corporation, has started an ad campaign called &quot;Stand Up for Your Right to Write Checks,&quot; complete with a mildly amusing video:</p> <object width="560" height="340"> <param value="http://www.youtube.com/v/fG3luLjg74Y?fs=1&amp;hl=en_US" name="movie" /> <param value="true" name="allowFullScreen" /> <param value="always" name="allowscriptaccess" /><embed width="560" height="340" allowfullscreen="true" allowscriptaccess="always" type="application/x-shockwave-flash" src="http://www.youtube.com/v/fG3luLjg74Y?fs=1&amp;hl=en_US"></embed></object><p>The video shows someone paying with a check at a convenience store counter. Even I don't try to do that any more. I did continue to write checks at the grocery store long after I'd quit using them at other stores, but I finally switched to credit cards about three years ago. (I long ago quit carrying a checkbook around with me, because the only place I ever write checks any more is at my desk.)</p> <p>Still, the general message &mdash; that the payer ought to have the choice of how he pays &mdash; is one that resonates with me. Any business that sends me a bill is going to get paid by check. If they can't deal with that, they're not going to get my business.</p> <p><em>How about you guys? Anybody else out there still paying their bills with paper checks?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/why-i-still-write-paper-checks">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/paper-checks-going-goinggone">Paper Checks: Going, Going...Gone?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-cards-vs-debit-cards-a-comprehensive-comparison">Credit Cards vs. Debit Cards: A Comprehensive Comparison</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-live-bank-free">5 Ways to Live Bank-Free</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-annoying-bank-fees-and-how-to-avoid-them">12 Annoying Bank Fees and How to Avoid Them</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-beat-debit-card-fees">4 Ways to Beat Debit Card Fees</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking bank accounts check writing checkbook debit cards paper checks Mon, 29 Nov 2010 13:00:08 +0000 Philip Brewer 327860 at http://www.wisebread.com Mom and Dad, Your Financial Decisions Matter http://www.wisebread.com/mom-and-dad-your-financial-decisions-matter <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/mom-and-dad-your-financial-decisions-matter" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/someone_s_parents.jpg" alt="old couple kissing" title="old couple parents" class="imagecache imagecache-250w" width="240" height="234" /></a> </div> </div> </div> <p>With Mother&#39;s Day in the recent past and Father&#39;s Day two days ago, I wanted to give credit where credit is due and encourage all the parents out there who are trying to teach their kids about money. Those things you&#39;re doing at home? They&#39;re working. Your kids are hearing it! Read below for some more suggestions as to what you can do to teach your kids about money. They worked on me! </p> <p>I don&#39;t know why you care about money (though I&#39;d love to hear it in the comments), but I care about money because my parents cared about money.</p> <p>Really, it&#39;s that simple. When I was growing up, my parents both showed me and taught me that my money and how I chose to spend it was important. They gave me an allowance, but they both encouraged and reminded me to save some. They helped me choose toys that I wanted (and could eventually get) to save towards. When I was old enough, they got me a savings account so that I could get my bank statement in the mail each month and see my money making money (and so I could feel like a big person, and associate that &quot;grown up&quot; feeling with &quot;saving,&quot; I suppose). Later on, they co-signed so I could open a checking account and taught me how to write a check, use my ATM card, and balance my checkbook every month.</p> <p>Beyond all of these things, though, I saw my parents value their money. I saw my dad (and later my mom) go to work every morning so that we would be able to have the things we needed and wanted. I saw dad sit down with his checkbook every month and balance it. I saw him write checks to pay the bills and I saw the little stamped envelopes go out in the mail. I heard him on the phone with different financial planners over the years, sorting out investments and retirement funds. </p> <p>I saw my mom buy things that were a good deal and skip the things that weren&#39;t, even when she wanted them. I helped her fill produce bags and weigh them, and then I helped her calculate what she&#39;d pay. I sat down with her to learn how to write a check and I saw her resolve the discrepancies in my checkbook that I didn&#39;t understand.</p> <p>I also saw the fruits of their labors. I watched them buy a car with cash. I went on vacations that we couldn&#39;t have taken without their careful saving. I saw the things that they could buy for each other and for us that wouldn&#39;t have been an option if they didn&#39;t have a financial plan.</p> <p>So to Mom and Dad (and to all the moms and dads out there who care about money and who are trying to teach their children to do the same), thank you. Thank you for showing me not only that making wise decisions about my money was important, but how to make those and what the results could be.</p> <p>Now it&#39;s your turn. Why do you care about money? Did your parents do anything that helped or hindered your relationship with money later in life? Please share: I&#39;d love to hear!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/mom-and-dad-your-financial-decisions-matter">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/balancing-act-the-perils-of-budgeting">Balancing Act: The Perils of Budgeting</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-amazing-board-games-you-can-diy">8 Amazing Board Games You Can DIY</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-clean-silver-naturally">How to Clean Silver Naturally</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-already-own-that-can-be-turned-into-a-tote-bag">10 Things You Already Own That Can Be Turned Into a Tote Bag</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/23-recipes-for-slime-your-kids-can-make-and-even-sell">23 Recipes for Slime Your Kids Can Make — and Even Sell!</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> DIY balance a checkbook checkbook fruit of their labor mom and dad parenting parents Tue, 19 Jun 2007 17:09:40 +0000 Sarah Winfrey 757 at http://www.wisebread.com Balancing Act: The Perils of Budgeting http://www.wisebread.com/balancing-act-the-perils-of-budgeting <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/balancing-act-the-perils-of-budgeting" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-504110530.jpg" alt="budgeting is a balance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For years, I've not had a budget because I didn't think I needed one. I never spent more money than I made, and I entered every transaction into my checkbook as soon as I made it (or, well, enough of them that it didn't much matter, anyway). I was sure to save some of my money (I even got a high-yield account from ING), and I even invested a little. I thought that budgets were for people who spent too much, and I simply didn't.</p> <p>When Dave and I were engaged, we sat down and had The Finances Talk. We shared how much we made, how much we liked to spend, what was important to each of us when it came to money, etc. In these conversations, we realized that, if we want to pay off our loans early AND put money into my 403b AND have savings for fun and emergencies, we would have to live on a tighter budget than either of us had ever experienced.</p> <p>This launched us into the land of budgets. When we set it up, we did so to limit our spending. We used PearBudget and it worked wonders. We set up categories, put our savings and school loan payments in first, and then moved the numbers around until they came to an approximation of what we make every month. It was that easy.</p> <h2>Or So I Thought...</h2> <p>What I didn't realize about a budget, as opposed to just balancing your checkbook faithfully every month, is that a budget doesn't necessarily help you stop spending. What it really does is helps you allocate your money and analyze your spending. If you keep it up faithfully during the month, it helps you know when to stop buying things. It also shows you where your money is going, which can help you see what is and is not a financial priority.</p> <p>The problem? There are some of these things that I DIDN'T WANT TO KNOW!</p> <p>I don't really want to know, for instance, that I spent almost $30 on my turtle this month. Now, it's just $30...but on the turtle!!??!? I love Cummings and all, but he's still just a turtle. I also didn't want to remember how many times Dave and I went to In 'N Out. It's not MacDonald's, but it's not where I want to drop my stash, either. I also didn't realize how much I like to spend on gifts and things for other people. What am I supposed to be &mdash; stingy?</p> <h2>Facing the Facts</h2> <p>As it turns out, our budget has raised more questions than it has given answers. Because Dave and I both can be (and have been, in this situation) fairly disciplined people, the budget has helped us spend less than we might have without it. It has forced us, in some cases, to choose where we want our money to go (Valentine's dinner out, or several more In 'N Out runs?). But it has also forced us to question ourselves and our spending. It has forced us to see how much more we'd be able to pay on the loans if we were cooking hamburgers at home.</p> <p>In the end I'm glad, I guess, that we have the budget (though I kind-of feel like I have to say that. I am, after all, a PF blogger.) Even though some of them are small, the questions force us to do more than run on autopilot. They make us actually choose where we spend our money, and (sometimes!) explain to each other why we chose to spend it there. And that seems like a good thing. Many times we choose to make the same decision that we would have made on autopilot, but the fact that it is deliberate and definitive means that we are spending the money and aren't left wondering where it all went at the end of the month.</p> <p>Consider yourselves warned, though. Starting a budget is so easy, but keeping with it so it can actually help you is harder than it seems!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/balancing-act-the-perils-of-budgeting">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/budgeting-for-the-rest-of-us-or-how-to-follow-a-budget-without-breaking-down-in-tears">Budgeting for the rest of us, or How to follow a budget without breaking down in tears</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/regifting-a-simple-how-to-guide">Regifting: A Simple How-To Guide</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/in-times-like-these-separate-the-want-from-the-need">In times like these, separate the want from the need.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/oprah-asks-a-great-question-what-can-you-live-without">Oprah Asks A Great Question; What Can You Live Without?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debt-repayment-is-not-an-expense">Debt repayment is not an expense</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting balance a checkbook budget checkbook Thu, 22 Feb 2007 23:23:52 +0000 Sarah Winfrey 225 at http://www.wisebread.com