Using Checks is Bad For My Finances

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I stared in confusion at the papers laying on the kitchen table as I attempted to reconcile our checking account. My mortgage statement said the amount due was $1543 as it always does. The numerical dollar amount written on duplicate of the check I dropped off at the bank matched, as did the receipt I got from the teller.

But that’s NOT what the written amount on the check said.

The written amount was, “One thousand forty three dollars.” I had apparently omitted the “five hundred” when I wrote out the check.

I needed to find out exactly how the bank was going to process the check. If there was one bill I didn’t want to be late, it was our mortgage. I called the bank with which I have my checking account.  After checking with their “back end” person, the representative told me that although the check was written incorrectly, if my mortgage lender had processed it as $1543, they would not correct it on their end and would let the full amount be deducted from my checking account. As much as this seemed like one of those “two wrongs makes a right” situations,  I was relieved that my mortgage payment would go through as I had intended.

I write very few checks, but this incident just reinforced a thought I have had for quite a while:  I should use checks as little as possible.

Writing checks is error prone:  This is exemplified by my introductory story. Had my bank processed the check as the written amount (as I had thought would be the case – check with your bank if this ever happens to you), I would have underpaid my mortgage and would have likely had to pay a $53 late fee. Had I taken the time to set up automatic payments, this would never be a concern.

Checks cost money:   A box of checks costs me right around $13. One box lasts a really long time, but automatic electronic payments are free.

Checks can be forgotten: In the beginning of September, Vonnie wrote a check for $12 to purchase a shirt from the school she works at. That check hasn’t cleared yet. Every time I reconcile the account it takes me a second to remember that I need to rewind my register back nearly 8 weeks to find that uncashed check. If I forget about it, and then it suddenly clears, I could be exposed to an overdraft charge.  Most electronic payments via debt card post immediately.  At most it may take 1-2 business days.

Checks can be abused:  Have you ever written a check on Wednesday knowing you don’t have the funds to cover it, but also knowing full well that it won’t clear at least until you get paid on Friday? I know I’m not the only one that has played this game. It’s not a good game to play. At the height of my financial irresponsibility I would spend enormous amounts of energy looking at how long a check to each of my monthly financial obligations usually took to clear. Using that information I would pay the bill as far away from payday as I could, and cross my fingers that it wouldn’t clear early.  Again, most electronic payments post immediately, and at most it may take 1-2 business days.

I don’t use a lot of checks, but I do use them for certain bills, and for times when it’s my only choice for payment. But because of this incident I’m re-evaluating all my payments and switching to electronic wherever possible.  It will be less error prone, and help keep us honest with where we’re truly at with our finances.

How about you, readers?  Do you have an interesting story about using checks?  Do you even use checks anymore?

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23 Responses to “Using Checks is Bad For My Finances”

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  1. Catherine says:

    I HATE cheques. I try not to use them. I never use them for bills unless it is a one time thing. I have to pay my licensing dues for work via cheque, an annual payment of $635.00 due every November 1st, last year they didn’t process the money until DECEMBER. I called constantly and they kept telling me it was in the hands of their accountant and nothing could be done about it and why was I so worried since the money needed to be in my account anyway?! Honestly. I actually have to go write a cheque right now though, thanks for the reminder 😉

    • Travis says:

      Anyone who questions why someone is asking when a check will be cashed (that was written weeks prior) has never sat down to reconcile an account. Ugh. Glad to be a reminder for you Catherine…..I just love how my friends from the north spell cheque. I think it looks way more cool, I just may start doing it. 🙂

  2. I use a check maybe once or twice a year. I just can’t stand them an their inefficiencies in today’s world.

  3. We use checks very infrequently. Other than our giving at church we maybe write 1-2 checks a year. Going electronic is just so much easier and we can keep a much better record of what’s been spent.

    • Travis says:

      John, my church actually offers “electronic giving” now too. It has to be the same amount, and has to be every week, but once setup we never have to write a check for our church donation either!

  4. Melissa says:

    I despise checks! If I need to use a check for anything, I’d rather use a money order. That way the money is out of my account and I don’t have to what for a check to clear. True there is a fee for the money order. Usually about $1.50, but it’s better that a $35 overdraft fee if I forget that I wrote the check.

    • Travis says:

      That’s a really interesting idea Melissa…..there’s also the inconvenience of having to go get the money order. But then again, you can get them at some gas stations at this point, so if you end up frequenting a place that sells money orders, that would certainly work for the very infrequent check user! Thanks for sharing, Melissa!

  5. JMK says:

    Writing a cheque feels like going back to the stoneages. The only way it could be worse is if I have to find an envelope and then put a stamp on it. I go to the post office on the rare occasion that I need to mail something. I haven’t bought stamps just to have on hand in at least 10 years.
    My beef with cheques, is that I just find it annoying to pay my bank for personalized bits of paper to perpetuate an inifficient payment method. As for tracking it, it’s really not that much extra work for me. As soon as I write the cheque I add a row to our spreadsheet and the amount is deducted off the running balance (as if the money were already gone). But I do the same for all VISA purchases. I assume that once I swipe that card the money is gone and can’t be respent. At the end of the week I rearrange the rows on my spreadsheet to include only the VISA charges that were processed (which I pay off) and any cheque that was cashed. Any VISA item which hasn’t appeared on the VISA website and any cheque cheque that wasn’t cashed just gets cut and pasted down the spreadsheet into the following week. The cheque amount now shows as coming out of the following week’s balance. Yes, it’s annoying to keep moving that row down the spreadsheet week after week if it isn’t cashed right away, but it’s never forgotten, and the money is in a perpetual state of “dibs” and can’t be respent causing an overdraft.

    • Travis says:

      Great idea to move the lines of the items that haven’t cleared yet to the bottom of your spreadsheet, JMK. Believe it or not, I still use a pen and paper check register…..why? Oh wow, I have NO IDEA! I’m moving to a spreadsheet and your technique TODAY! Thanks for the push!

  6. Monica says:

    I don’t like checks for that very reason…using money you don’t actually have. I have known people to actually get themselves into trouble and had their accounts closed because they couldn’t keep up with the fees. I have done it in the past and found it not worth the stress. I don’t think I have written a check in about 3 1/2 years.

    I appreciate how you share all of your new ways of growing with everyone. I have learned a lot from your posts. Keep up the great work!!

    • Travis says:

      Sharing lessons learned and how we grow…..that’s exactly my goal with blogging, Monica! 🙂 I hope that by learning and growing and sharing my posts will be beneficial for others going through the same struggle with debt. Great to hear from you, my friend!

  7. We use cheques here and there but we certainly don’t pay for them as they are free with our bank. My cheques from the UK are also free and I use them to send home money for the relatives for Birthday’s and Christmas time. I’ve even made mistakes paying bills on line as human error can happen anywhere as can computer glitches. The big thing for me here is documenting. If you document your expenses even if you do use cheques you should have no problems balancing the budget. The crap part is it takes too long to pay a bill and you have to pay for postage on top bla bla. It’s easier to do it online IMO. Great post. Mr.CBB

    • Travis says:

      That’s awesome that your cheques are free, Mr. CBB! Checks are pretty convenient for sending cash-like gifts to people – I hadn’t thought of that one. You’re right in that it certainly is possible to keep track of cheques and keep your finances on track….but it there are instances where it just makes it a little bit more difficult – and in my book, easier is better! Thanks for your comment!

  8. Kathy says:

    I have found that paying by check is truly discouraged – perhaps because of the human error factor? A long time ago I set up auto payments because it was just taking me too darn long to pay bills AND I had to disciplined to do so every week. That was very hard to do with working full time and having 3 young children in school (oh, the homework “discussions”!) and in various after-school activities. Auto payments made it very easy to sit down and do bills just once a month while reconciling my bank statement.

    To make it easier on myself and to take advantage of the cash-back program, everything I could set up as auto charge to my credit card I did so. Then I set it up so that my credit card would be automatically paid at the end of each month. For those bills I couldn’t charge to my credit card or would have incurred a fee if I did, I had them automatically deducted from my account. At the beginning of each month, I would reconcile my bank statement and then deduct on paper all the auto charges for the upcoming month. Yes, including – and especially – those charged to my credit card.

    As an aside, I was also charging gas & groceries to my credit card, I would add them to my check book register so as to deduct them as well. Didn’t want to be spending that money twice or be caught by surprise when the credit card statement came in! Frankly, that got to be toooooo time consuming, so I finally got smart and decided to use the old-fashioned cash/envelope system. Amazing, but I was able to cut my spending in those areas by almost half! So it’s true that by using cash we spend less. Just goes to show that an old person can be taught new tricks. 🙂

    oh, and I, too, use paper/pencil for balancing my accounts. But I use a regular-size sheet of paper vs those little itty bitty registers given (with my free checks). I tried the spreadsheet system but found it limited me as to where and when I could work on it. By keeping it in a folder and with a small calculator (still don’t use my phone for that), I could work on it if need be in the car while waiting for whoever to come out from their practice or whatever. I am even odder in that I keep with this little bundle different color hi-liters, using them to have various line items stand out (for example, medical expenses so I can deduct them). At the end of the year, I put all those pages with my tax info & keep it with that after filing those horrid tax forms.

    Great blog BTW – you keep it real, entertaining, and informative. I’m always open for suggestions on how to improve and tips from you & others here have been very useful. Thanks & pls keep this up!

    • Travis says:

      Sounds like you’ve gone through some trial and error to find the solution that works best for you – Vonnie and I are going through that process. I guess I’m not sure that anyone ever should say they’ve found the system that works for them forever….we’ll all probably have to change and evolve over time. We pay our bills either through electronic payment or checks (hopefully less checks now), but all our “weekly” spending is also through the envelope/cash system. We also have found that we spend less, and that it’s easier to stay on budget, when we deal with cash in hand!

      Thanks for sharing your system, and for your support & kind words….I’m happy to hear that you take something positive away from the posts here at Enemy Of Debt – that’s what we’re all about! Take care, and hope to see you in the comments section again soon, Kathy!

  9. Petunia 100 says:

    I have only recently decided to stop using checks unless I have no other choice. Stamps are going up yet again, and bill pay means you avoid postage.

    I like to use my rewards cards to pay everything, provided there is no fee to do so. I can now use a rewards card to pay my car insurance, my monthly water, sewer, garbage bill, my electric bill, my gas (heating) bill, my internet bill, and my cell phone bill. Then one electronic bill payment to the rewards card takes care of them all.

    Unlike previous commenters, I dislike that the money leaves my account the moment I send an electronic payment. If the payee does not receive the money for some reason, I won’t know until I receive my next statement, at which point I would already be late.

    • Travis says:

      Using a rewards card to pay for everything is a good point, Petunia100 – especially if you use it for all your monthly obligations, you could probably rack up points pretty quickly.

      You mentioned you dislike the money leaving your account immediately as in the event they don’t get the money you wouldn’t know until the next statement……don’t your creditors send an electronic receipt for electronic payments? I get an email whenever my garbage, electric, gas, phone, etc. get the payments. Maybe not every company does that?

  10. Call me crazy, but I do enjoy the part about checks where it connects me to my money. Writing a check hurts! Not as much as handing over $1000 cash, but writing a mortgage check I imagine really hurts and nails home the feeling that you are paying for something. I think checks still have a place in society, although they are a dying breed.

    • Travis says:

      I agree, Brent….writing out big checks does hurt and make a guy really think about what it is he’s paying for! But doing the subtraction of that same big number while reconciling my bank account hurts just as much…LOL. Although I must say…..if there’s one thing that spending a lot of money on that brings me a lot of value, it’s my home. I spend a lot of time in it and get a lot of enjoyment from it – not to mention warmth in the winter, and coolness in the summer, and protection from weather. Always great to hear a little different perspective, and I can usually count on you to provide it, Brent! 🙂

  11. Grey Logan says:

    I use checks for quarterly estimated tax payments and magazine subscriptions. These types of checks clear very quickly and rarely cause me any distress. However, last fall I made a donation to a local organization of over $100. While they took 7 weeks to clear my check I lamented to myself every day as I checked in with my account online. AAArrghh. Next time I’ll give cash.

    I must admit thought, the physical act of writing out the check is kind of fun, no? It feels vintage and old fashioned.

    • Travis says:

      It’s that kind of lamenting that I would like to avoid, Grey. hahaha 🙂 Writing out a check does indeed feel vintage, old fashioned, and nostalgic….not sure about fun though – being a software engineer, I type everything, my handwriting is notoriously bad, and the act of writing anything without a keyboard sincerely hurts my soul. 🙂

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