Manage Your Checking Account
Learn the basics of proper checking account management
Balancing a checkbook used to be an essential component to checking account management. Now with more and more Americans doing business, paying bills and checking account balances online, it can be easy to lose track of daily spending habits. However, if you consistently manage your checking account, you could find yourself saving money each month. From writing checks and using a debit card, to balancing your checking account and handling multiple accounts, we'll help you learn how to manage a checking account simply and easily.
Making deposits and withdrawals from your checking account
One of the benefits of a checking account is convenient access to your funds. In order to effectively manage a checking account, take advantage of both online and offline routine banking options. Deposits can be made in person at a bank, through an automated teller machine, or ATM or you may choose to have a paycheck directly deposited.
Debit cards come with a personal identification number, or PIN, that allows you to securely access your checking account from any ATM. Also, you may use your debit card for purchases at gas stations, grocery stores or restaurants, as well as other shops that accept credit cards. These purchases are not billed to you as credit, but instead are deducted from your checking account balance.
Electronic transfers and payments can be set up through online banking and be made on an individual or reoccurring basis. These purchases are not billed to you as credit, but instead are deducted from your checking account balance.
While check writing may seem outdated for some, it's important to know how to write a check for the rent, taxes, gifts or other personal items when you don't have cash in hand and cannot use a debit card.
- Use ink when you write a check. This restricts anyone from adjusting the amount or recipient of the check.
- Fill out all areas of the check including who payment should be made to, the written and numerical amount of the check, the date, purpose of the check and your signature.
- If you make any mistakes be sure to write VOID across the check and note the reason in your check register.
- Keep track of any checks (including voided checks) you write in your registry by noting the number of the check, the amount, what the purchase was for and the date. Follow up on these checks and mark when they clear with the bank. (A cleared check means payment has been taken from your account and given to the recipient.)
- Call the bank and cancel a lost blank check or debit card immediately to prevent any unauthorized draw on your account.
Knowing how to manage a checking account could save you money long term
The most important rule of checking account management is to record every transaction. You may choose to use a check registry and record each purchase as you make it, or save receipts and write them in a separate ledger. Either way, managing your checking account in an accurate and timely manner allows you to catch any errors and understand ways to cut back spending each month. Typical transactions to include are:
- ATM withdrawals
- Debit card purchases
- Automatic bill payments
- Account transfers
During the month, make it a habit to check your banking activity - you can usually do this at no charge using Online Banking. When you get your printed or online bank statement each month, compare it to your ledger to make sure all your purchases and deposits are accounted for. If there are any discrepancies, double check your addition and subtraction, and don't forget to account for any ATM or account fees. Remember, it sometimes takes three to five business days for some transactions to post. If you still can't figure out the issue, contact your bank or the merchant in question.
Managing multiple checking accounts for better budgeting
Another general rule of thumb is to leave a set amount of money in your account at all times. If you manage your checking account properly, this "cushion" will help ensure you have enough money to cover all of your transactions. You may also want to consider setting up a Savings Overdraft Transfer Plan or an Overdraft Line of Credit Plan. With an Overdraft Plan, funds from a linked savings or Overdraft Line of Credit are automatically transferred to your checking account when you don’t have enough money to cover a transaction.
Managing multiple checking accounts may help you closely manage your budget. Some people choose to use one account just to pay bills, while keeping another for discretionary income. You can also set up direct deposits from your checking account to your savings account in order to increase your savings each month. Consider your current budget and pick a set amount each month to go directly to a savings or money market account where it has the potential to earn interest rather than in your checking account.
Open a checking account with Citizens Bank
Knowing how to manage a checking account is an important element of financial freedom. If you have questions about which checking account options might be right for you, or how to use checks and debit cards, speak to a Citizens Bank representative at 1-877-360-2472. You may also choose to open a checking account today or combine accounts with the Circle Gold Banking Package.