Unit 3B: CheckingManaging your

CheckbookMr. Elsesser

Introduction toFinancial Management

Understanding Your CheckbookUnderstanding the parts of your checkbook will allow you to correctly manage and use your checking account :

You need to be able to: Identify parts of a check Write checks Endorse Checks Know how to use Overdraft

Protection Carry out Checkbook

Reconciliation

Identifying Parts of a Check

#11: Check Number:Usually a 3-4 for easy identification.

#2: Payee Line:Who the check is payable to.

#3: Numeric Amount:Check amount noted numerically (# form).

#4: Written Amount:Spelled out amount of dollars/cents paid.

#5: Memo:Quick comment remark about check. (What is it for? Account number of bill being paid)

#6: Date:Today’s Date—check good for 6 months.

#7: Signature:Your signature. Protects against fraud

#8: Bank Information:Your bank information.

#9: Routing Transit Number:9 digit number used to route your check.

#10: Account Number:Your bank account number.

#1: Personal Information:Information about you, the account owner.

#12: Your Bank’s Fractional Number:

Another version of routing number.

Tips for Writing ChecksThere are several things you need to know to be able to correctly write out checks:

Writing out Numbers: $523.34 Five Hundred Twenty Three Dollars

34/100 $30.00 Thirty Dollars or Thirty Dollars 00/100

12,532.50 Twelve Thousand Five Hundred Thirty-

two Dollars 50/100

Tips for Writing ChecksAVOID WRITING OUT CHECKS TO

CASH: When you write out a check to cash,

it is treated like cash. Anyone can cash it! Harder to cancel and track! Some banks and businesses will not accept.

If you don’t know who to make check out to, leave payee field blank.

DO NOT SIGN CHECK UNTIL YOU FILL IN PAYEE.

After Writing the Check…Record Check in your

Check Register: Book that comes with

your check book to record deposits and withdrawals.

Some people do this electronically.

Sample of Check Register

Sample of Completed Check Register

Sample of Completed Check Register using Excel

After Writing the Check…Each month complete a

Checkbook Reconciliation: Check your register with the

monthly checking account bank statement.

Ensures your records of checks match up with what the bank has recorded.

Identifies non-deposited checks. As you verify each

deposit/withdrawal, check it off in register.

When you Receive a Check…You need to Endorse it:

Signatures on the front and back of check stating that both parties agree to the amount being transferred.

Receiver of funds signs their name on the back.

Writer of check signs on front.

Examples of Endorsing…

Overdraft ProtectionOverdraft protection protects a checking account against insufficient funds.

Account balance could not cover written checks. Checks that can be cashed are called “bounced

checks” Payee and Account holder will be assessed fees.

This is a service you need to subscribe to—not automatic.

Can work 2 ways: 1. Bank gives you a loan on the money

owed with an interest charge. 2. You backup your checking account

with a savings account. Small fee will be incurred sometimes.