Credit cards, debit cards, mobile payment apps. Today’s technology makes it extremely easy for us to pay for things without having to write out a check. With the ease of online banking, anyone might think that paper checks are outdated. However, it is a practice still very much in use. Check-writing has been in a progressive decline since its peak in the mid-1990s. But, according to the federal reserve, a staggering 14.5 billion check payments (to the value of $25.80 trillion) were made in 2018.
Why are Americans Still Writing Checks?
You might think that it is only the baby boomers and generation Xers that are writing all those checks. The truth, 42% of personal checks are written by Millennials. Why? Some businesses only accept checks for deposits, housing rent, and large purchase down payments. So, now that you know that knowing how to write a check is quite an important skill. Here is the low down on the dos and don’ts.
Check Anatomy 101
To avoid missing any important details, let’s get to know the parts of a check:
- In the top left corner of the check: Your personal details. This includes your name, address, and if you choose, your phone number.
- Top right-hand corner: The check number – for your reference.
- Top right: The date line. More on this later.
- “Pay to the order of”: this is the recipient, or payee, line.
- The line just below that is the payment amount line.
- Just below that your bank’s information should be printed on the check already.
- Empty box on the right-hand side: the payment amount box with the dollar sign.
- The memo line.
- The signature line. This is where you leave your John Hancock!
- Beginning at the bottom left of the check are two printed numbers. These are the bank account routing number and the checking account number.
Our Step-by-Step Guide on How to Write a Check In 2020
Step 1: Fill in the Date
In the top right corner, fill in the current date. Month, day, year. This will usually be the day that you are writing the check. However, if there are a few exceptions. If you want to make sure that there are funds in your checking account before the payee withdraws money from the account, you might postdate the check to a date that you know that there will be sufficient funds. Another scenario. Your rent is due on the first of the month, but you are writing the check two weeks prior. In this instance, you will date the check for when that payment is due. That is to say, the first of the month.
Step 2: The Payee Line
This line is where you write down the name of the person or business to whom the payment is being made. Very important: Never leave this line blank. If you do so, someone else could take the liberty of inserting their name in this line and erroneously receiving the funds.
Step 3: Fill in the Amount in the Payment Amount Box
Write the amount to which the check is being made out, in digits, in this box. A tip: Align the dollar amount all the way to the left of the box so that no-one can change your $315.20, to $1315.20.
Step 4: Writing Out the Dollar Amount
Now, on the line directly below the Payee line, write the check’s amount out in words. For example, Three Hundred and Fifteen Dollars and Twenty cents. An alternative is to write “Three Hundred and Fifteen Dollars and 20/100”. Draw a straight line to the end of the field to ensure that there is no space for more words to be inserted.
Step 5: Add a Memo Note
If you choose to, you can add a memo to yourself to remind you of why the purchase or payment was made. On the other hand, the recipient might have asked you to provide a reference number or ID to make it easier to trace the payment.
Step 6: Sign on the Dotted Line
Very important! Your recipient cannot deposit these funds if you have not signed the bottom of the check.
Should I Keep a Record of the Checks I Write?
Yes, absolutely! If you are in the habit of writing out checks, keep a checkbook ledger. A check register helps you to keep track of your checking account’s balance. The check register will reflect the expense even if the amount has not yet been drawn by the payee. Remember to double check with your bank statement every month.
Keep track of all the check payments that you make with their appropriate dates and amounts. Make sure to balance these outgoing payments with the funds in your account so that there is no risk of overdrawing on your checking account and getting charged for an overdraft fee.
5 Important Things to Remember When Writing Out a Check
- Always use a pen (black if possible) to write out your checks. It is too easy to change words written in pencil.
- Make sure to write the correct business name or title in the payee line. Some businesses might have a “trading as” name, while their banking is under another name.
- Don’t stress if you make a small mistake on the check. Correct the mistake and initial.
- If the mistake is too big to be corrected, write the word “VOID” across the face of the check. Another option is to tear it into tiny pieces or put it through a paper shredder.
- You will want to be sure that there are sufficient funds in your account for when the check is dated for. Bounced checks can incur hefty penalties.
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