Bad checkbook habits
In my early years as a financial counselor, I received a call one afternoon from a young man I'll call Lee. He was distraught. "My wife, Melody, has been arrested for writing a bad check," he explained. "Can you help us?"

Melody turned out to be a high school math teacher with a graduate degree, and this was her third bad check to the same merchant. Unfortunately, no one had taught Melody the basics of handling money.

Melody had three bad checkbook habits.
  • She waited as long as a week to record checks in her checkbook. By then, she wasn't sure if a check was for $16.11 or $11.16.

  • Her checkbook ledger was cluttered with notes such as "See check number 62." When I turned to check number 62, there would be a second note directing me to another place. And so it went.

  • But Melody's biggest mistake each month was taking the balance on her bank statement and adding it to the balance in her ledger-without deducting her outstanding checks.

Checkbook revival
My solution to their problem was threefold.
  • We started with closing out her existing checking account (since it was in such a mess).

  • Then, we opened a new account, using a checkbook that provided a duplicate copy of all the checks she wrote.

  • Finally, I showed Melody how to keep her checkbook balanced. An accurately balanced checkbook is essential, because even small errors can translate into major problems if they are allowed to compound. All checks should be entered in the checkbook ledger when they are written. This entry should include the check number, date, assignee, and amount.

Automated problem agents
Automatic payment deductions need to be carefully tracked, as do any direct deposits. Since you don't actually write a check for the payment or deposit a check yourself, it's easy to lose track of those transactions.

Automated teller machines (ATMs) are another problem. All too often, these "easy money" conveniences don't get recorded. The result is overdrafts, high fees, and accumulating debt.

Suggestions to avoid the checkbook blues
  • Have only one bookkeeper for your checkbook. When more than one family member tries to keep the records, confusion often is the result.

  • All checks should be written from the checkbook only. Tearing checks out of your checkbook can cause big headaches. You'll wonder if you left the check in your shirt pocket, purse, glove compartment, or billfold.

  • Bookkeeper advice: Never allow the balance of your home checkbook ledger to disagree with the balance on your bank statement. Always remember that the two most common checkbook errors are math mistakes and writing in wrong amounts.

  • Be sure to balance your account to the penny every month! It will probably keep you from being arrested like Melody was for writing bad checks. Besides, you'll realize the wisdom of a wise king, who said long ago, "The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty" (Proverbs 21:5).