The information in this post is provided by our partner Accel Financial Counseling. Accel’s counseling services and educational programs are available free to all Consumers members.
Knowing how to successfully manage a checking account is an important component of sound personal money management. It allows you to establish a strong relationship with your credit union and have access to other financial products. The following tips will help you to stay organized and manage your checking account with ease.
Create a spending plan
A spending plan, or budget, will help you organize your finances and maintain your checking account. Develop a plan that makes the best use of your money to be sure your dollars stretch to cover all your financial needs.
Maintain your check register
Your check register is an important record of your financial transactions. Despite advances in online banking and budgeting programs, many members learning to budget and keep track of their account balances find it helpful to keep a written record of their transactions. If you want to maintain a check register to keep track of your accounts, remember to record all account transactions in your register, including written checks, ATM withdrawals, online and telephone transfers, and deposits. If your check register is kept up to date, it will always provide you with your current balance.
Don’t rely on “float time”
The period between when you write a check and when it is debited from your account is called float time. Because retailers can process checks electronically, float time has become virtually non-existent and checks can clear the same day they are written. Therefore, it is important to have enough money in your account to cover the amount of the check on the date that you write it.
The same is true when you make transactions with your debit card; treat the money you spend as if it is immediately unavailable in your account (usually it is).
Know if you have overdraft protection
If you write a check for more than you have in your account, the check will “bounce,” and be returned as non-sufficient funds (NSF). This can be quite costly, as you may be charged for the NSF. If you have overdraft protection (Courtesy Pay), however, your credit union may pull funds from your savings account or from a line of credit in order to cover the NSF. You will still be charged a fee by your credit union if you overdraft your account; however, the fees are often less than if you bounce a check, and you won’t face a fee from the retailer for having written a bad check.
If you want to learn more about how to properly manage your checking account, visit www.checkright.org, an online self-study education module. CheckRight was developed by Consumers Credit Union’s partner in financial wellness, Accel Members Financial Counseling. If you have a question about your own personal finances, call an Accel counselor Monday through Thursday 8 a.m. to 12 a.m. (EST), Friday 8 a.m. to 7 p.m. and Saturday from 9 a.m. to 1 p.m. at 1-877-33ACCEL (332-2235) or visit them on the web at www.accelservices.org.