If you didn’t hit the recent $590 million Powerball jackpot and your dreams of never having to worry about finances again have been dashed, it may be time to continue (or start) to practice proper financial practices. Tom Targos of Kenosha News recently published some simple ideas to make sense of your financial situation. One of their suggestions is to spend at least 15 minutes a day managing personal finances. Perhaps the most effective way to do this is to simply balance the checkbook.
Just because you may no longer carry your checkbook around with you doesn’t mean it should not be balanced frequently. The word “checkbook” harkens back to an earlier time when people would roll their eyes as someone cut a check in the grocery store because of the length of the check verifying process. Today, most people use debit cards on an everyday basis. Even paying bills with checks is on the decline as many companies offer perks for paying bills online.
Even if you haven’t cut a check in more than six months, you shouldn’t allow the checkbook to gather dust. Those checks may be on their way out but they include a very useful tool—the ledger. Everyone is busy these days and details are easily forgotten. For example, someone might forget that they made a quick stop at the ATM or used their debit card for lunch. Sitting down each night and thinking, “okay what did I spend today?” and noting it in the ledger, is the first step to ensuring healthy finances.
Some people rely solely on taking a look at their bank account info on the internet every now and then to make sure everything is posting correctly but, just as you may forget a trip to the ATM, a clerk at the bank could also miss something. If you don’t balance the checkbook, you won’t have your own records to spot when the bank has committed an error.
Bounced checks and Non-Sufficient Funds (NSF) fees can add an extra $25 to $40 to each transaction. Once one NSF fee is added to an account, it could have a snowball effect. People who live paycheck to paycheck and have little cash in their accounts at the end of each pay cycle could see their accounts fall into the red.
Multiple NSF fees and bank accounts in the red can wreak havoc with someone’s finances and it can be a hole that is extremely hard to climb out of. This is a situation that can be easily avoided by devoting just a little bit of time, attention and care to the checkbook.
