Back to Basics : How to Write a Check.
I opened my first checking account when I was 16 years old. My parents insisted that I learn how to manage money, to write checks, and balance the register every month. Today, it’s rare to see someone use a checkbook or maintain the old-fashioned paper registers, even though they are still included in a new box of checks.
Now we can make transactions over the internet and check our balance on the spot. A 2013 Federal Reserve study reports that in 2012, only 15% of non-cash transactions in the payment system were checks, down from 46% in 2003.
Paper or Plastic?
But hold on to your bankbooks – according to a 2013 survey conducted by WePay, 72% of small business owners still prefer paper checks or cash over credit cards as payment. Some businesses may not even have credit card processing capabilities.
I still have a checkbook, and I use checks as a paper trail of sorts for property tax and income tax payments, payments for services like electrical work or plumbing work, etc. And when I wake up in the middle of the night, wondering if I have sent out my estimated taxes to the state treasury, the check carbons serve as a memory backup.
But to younger adults, a checkbook seems, well, old. Some have never even written out a check.
Hashtags have replaced checks?
Recently, a younger friend told me he was embarrassed to admit he did not know how to fill out a paper check. The fact is that many have never been shown how to do so, and checks are considered obsolete in many circles. The world speaks in 140 characters, and pays bills with the push of a button. But there may come a time when a landlord demands a check, or that mom-and-pop business can’t take a credit card. So you should learn how to fill one out, just in case.
How to write a check
1. At the top right-hand corner of the check, write the current date, including the month, day and year. USE A PEN.
2. Halfway down the check, you will see the words “pay to the order of,” or something similar. On this line, write the name of the business or person you are paying. Ask the person for the correct spelling – some banks can be persnickety about this.
3. To the right of that line, you will see a dollar sign and a box. Write the exact amount due, in numbers. For instance, if your bill totals $13.51, write that amount in that way – do not round up or down.
4. Directly below the “pay to the order of” line, there is a line that ends with the word “dollars.” On this line, write the amount due in longhand. Write “thirteen and 51/100.” The change is written in a fraction, as 51 cents is 51 one-hundredths of a dollar. If there is no change, you will write out the dollar amount only, or include “00/100” to indicate there is no change. Always fill blank space with a line, to make sure someone from changing the amount.
5. On the bottom left, include information about the check. A check to the city for property tax payments might include the city lot number or other information to mark the payment for a specific property. A rent payment should always include the address and/or apartment number in the memo line. It’s also a place to say “Happy Birthday!” on a gift check, or “Thank you” to a serviceman.
6. At the lower right-hand corner, there is a line that may not have a label, or it may say “signature.” This is where you sign your check. An unsigned check cannot be cashed or deposited, so don’t forget to make your mark here.
It’s real money, honey.
Remember, a check is not a credit card. Once the check is deposited, that amount is deducted from your checking account. Keep track of your checks and maintain a balance in the register. Or check your online transactions to make sure they match your records. This is important. Bouncing checks (writing checks that total an amount greater than the balance in your checking account) will start a snowball of returned checks and charges. This can also affect your credit scores. Just don’t do it.
This post may seem very basic and simple for CashCrone readers. But here’s the thing: managing money should be simple. Learning how to write a check, how to pay a bill, to keep an eye on the bottom line of your budget – those are the beginning steps to wealth.
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