"If you can write a check, then you have all the skills necessary to balance a checkbook."
Wow. If this is how certain financial educators view the world, then clearly we are in much worse shape than I ever imagined.
Writing a check is a trivial exercise. You only need to write the date and amount, copy the payee's name, and sign your name. Almost every 10-year-old can easily write a check.
On the other hand, balancing a checking account requires additional knowledge and skills that are not usually taught in school (or at home). This is why the average 16-year-old does not know how to properly balance a checkbook, and many adults don't know how to do that either.
While balancing a checkbook isn't rocket science, there are a number of things to understand beyond how to simply write a check. At a minimum, a checking account holder should understand that:
- Banks often charge maintenance fees, which are automatically deducted at monthly intervals.
- Banks typically place a hold on deposits. You cannot withdraw that money immediately.
- Checks do not clear immediately.
- Your bank statement or ATM receipt indicates your cleared balance, not your working balance.
- You alone are responsible for keeping track of your working balance!
- Signing a check is like signing a binding contract.
- It is illegal to knowingly write checks with insufficient money to cover them.
- Inadvertent overdrafts typically incur interest and/or fees, and overdraft terms vary widely.
- Personal checks are not guaranteed funds.
Apparently, we first need to start educating some of the educators. I'd say we've got our work cut out for us.