Teaching Kids About Using Checks
Writing a Check
If a child has never written a check before, it usually takes only a few minutes to explain how to do so. Just follow these steps while referring to the picture of a check that follows:
- Enter the date in the space provided at the top right of the check. It doesn't matter whether you write “January” or use the number “1” to signify that month.
- On the line that says “Pay to the Order of,” you write the name of the person or company you owe. Your child doesn't have to write “Mr.” or “Mrs.”; just the person's name will do.
- At the end of the line for “Pay to the Order of,” you enter the amount of the check in numerals. Be sure to put a decimal after the dollar amount. It's helpful to write the cents as a fraction as well, the numerator of which is the amount of the cents and the denominator of which is “xx.”
- On the next line, write out in words the amount of dollars in the check and the word “and,” and then enter in numbers the amount of cents. For example, write “Twenty-one and 13 cents.” Again, use the “xx” under the cents amount.
- On the line in the lower-right corner, your child should sign (not print) his name as it appears on the account.
- On the line in the lower-left corner (sometimes labeled “Memo”), your child can—but doesn't have to—enter what the check was for. This serves as a reminder of why you made the payment. If the check is for payment on an account, your child can enter his customer or account number on this line.
Watch Your Step
Be sure to subtract any fees and charges to the account. For example, there's generally a fee for printing your checks, and there may be monthly or per-check fees as well. To reduce fees and charges, college-age children may be eligible for special student accounts that generally have modest or no fees and no required minimum monthly balances.
Keeping Track of Things
Your teenager should want to know how much is in his account at any given time. This is important so that he doesn't go overboard and write a check for more money that he actually has. The only way to keep track is to record all his checking activities.
When a check is cashed by the person he has given it to, the bank subtracts that amount from his account. A subtraction from the account is also called a debit.
The record of checking activities is made in a check ledger, called a checkbook register. To keep track of the account balance, enter into the check ledger the amount of money that's been put into the account to open it. This is called a deposit (it's also called a credit). Then, every time a check is written, enter information about the check—the date it was written, the check number, who it was written to, and the amount of the check. Subtract this amount from the balance. Every time money is added to the account, this amount is also added to the balance. As your child can see, the balance is constantly changing.
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Excerpted from The Complete Idiot's Guide to Money-Smart Kids © 1999 by Barbara Weltman. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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