Many times most people do not think too seriously of writing bad checks. Some do not even care about the $20-$30 service fees assessed when one of their checks gets returned for non-sufficient funds or NSF as it is commonly known. In some cases, if the bank can prove that a person is intentionally writing bad checks, it can go after the writer for fraud. Repeated writing of NSF checks can also be reported on a person’s credit rating so it is wise to take measures to help reduce and prevent the risk of being negatively affected by a NSF check.

The best way to keep yourself protected from writing a bad check is to make sure that you always keep your checkbook balanced and up to date. That means as soon as you withdraw money from an ATM, do an internet transaction, or write a paper check, make sure that it is recorded in your checkbook register. Some have suggested that you even round the cents up to the nearest whole dollar as you record the transaction in your register to avoid running into a NSF situation over a few pennies. This might cause some problems when balancing your checkbook but it puts you at a very low risk of writing a bad check.

Also, it is a good idea to get a checking account with overdraft protection. This does not mean that the bank will not charge you a service charge when the NSF check reaches the bank. The advantage is that the bank will honor the check and then turn around and assess a $20-$30 service fee on you. If you continue to write the NSF checks even with overdraft protection the bank could frown on this and close your account. Not only that, it could get very expensive for you and it is a sad waste of money.

Making Budgeting Easier by Using Separate Accounts

One way to avoid writing bad checks is to have separate accounts. One of the problems with a budget and where two spouses both have access to a joint checking account is that daily expenses can interfere with keeping a pool of money for paying bills. For example, one spouse may need to get gas for the car and uses a debit card to pay for the purchase without knowing that the other spouse is at home paying for another bill from the same account online. The problem is that the combination of the gas and bill might put the account in the negative. This is a serious problem and occurs often when money for daily incidentals and bills comes from the same account.

A way to prevent this from happening is to have a separate bank account used for only paying bills. This reduces the risk of conflict between having to spend money on the daily things at risk of taking money for paying bills. Look for a free checking account for this second account. That way you do not incur additional charges to maintain bank accounts.

There are many obvious advantages to keeping your accounts this way. For starters, you have a record of every bill paid on one consolidated statement, which is an obvious advantage when doing budget planning. This way, as you do budget planning, you see all of your bills paid on a monthly basis together. Plus the statement does not get cluttered with things like ATM withdrawals that can really confuse checkbook balancing.

Doing it this way also has advantages for the account used for daily incidentals in that you can analyze these variable expenses and take measures to keep them under control. Let’s say that when you analyze the statement from the daily incidental statement that you see trends in spending that could be cut back such as too many fast foods restaurants. It would all be right there on one statement and you can compare it with next month’s statement to see if it improves.

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