Although online payment is prevalent nowadays, you may still find yourself in a situation where you need to write a check. For example, when you pay a contractor that doesn’t take a credit card payment or when you write a deposit check for your home purchase. If you are not familiar with how to write a check, don’t worry because we will show you how to do it.
Important Information on a Check
When you open a checking account, your bank will give you a set of starter checks. If you plan to use more than what the bank gives you, it is a good idea to order at least a box of checks so that you always have some on hand.
First, let’s take a look at important information on a typical check:
A. Your Information – This is where your name and address go. Some Payee will not accept a check without your name and address.
B. Check Number – This is a sequential number. When you order your check, you can specify the starting number. Generally, 0001 is a good starting number. This number is important for your record-keeping, but you do not have to write your checks in the sequential check number order.
C. ABA Number (or Routing Number) – This number identifies the bank that holds the account. This number is used when you want to use ACH (automated clearing house) to pay your bills online.
D. Account Number – This number identifies your account. This is another important number you need when you set up an ACH payment.
E. Check Number – This is the same as B, but this number is repeated here for automatic scanning purposes.
IMPORTANT: To be safe, it is a good idea to protect your ABA Number and Account Number because an unscrupulous person could try to use the information on your check to take money from your account.
How to Write a Check
To write a check, you have to fill out a few fields as follow:
- Date – This is the date that you write the check. It is possible to post-date a check and write it for a future date, but it is not recommended because if the recipient deposits the check before the post-date, then the check will bounce. You both will also end up paying a penalty fee.
- Pay to the Order of – This is where you write the name of the recipient (person or company).
- The box with the $ in front – In this box, write the amount you want to give to the recipient (person or company). Use numerical numbers like 1234 (e.g., 120.57 in our example).
- The blank line that ends with the word DOLLARS – This is where you write out the amount you want to pay the recipient (person or company). Here, however, you write longhand (e.g., “One Hundred Twenty and 57/100” in our example).
- To be sure someone doesn’t add anything else, you can draw a straight line until you get to the word DOLLARS.
- If your amount ends in zero, you can just write xx/100 or 00/100.
- If it ends with some pennies, then write the number of pennies over 100. For example, 57 cents would be 57/100.
- Memo – This is a memo for either yourself or the person/company. If you are paying a bill, always include the account number, invoice number, or something to identify this check with your bill.
- Blank line on the bottom right – This is where you write your signature. The person who signs the check must be the account owner. For a joint account, only one of the two owners needs to sign.
How to Enter Transactions into the Checkbook Register
When you start writing checks on your checking account, it is important that you keep an updated checkbook register. If you don’t, you might overdraw your account and be forced to pay fees to your bank. Some banks will charge outrageous fees for this type of error, so add your numbers carefully.
Anytime you write a check or make any withdrawal from the account or make a deposit, you must write that down in your checkbook register. Maintaining your checkbook register will require some discipline, but you cannot organize your finances if you do not keep good records.
Image from Somerset Trust: Your Checkbook Register
- Check Number: Include the check number or transition type (ATM, cash, etc.) in the first column. Typical transaction type codes: Deposit: D, ATM Withdrawal: ATM, Check/Debit Card: CC, Electronic Payment: ET, Automatic Deposit: AD, Tax Deductible: T, Other: O.
- Date: date of the transaction
- Description of Transaction: This is just a note to help you identify the charge.
- Payment/Debit: If you took money out of the account, write the total here.
- Fees: If the charge was the result of some bank fee, just put a checkmark in this box. If your bank starts adding too many fees, you may need to change banks.
- Deposit/Credit: If you put money into the account, the total deposit amount goes into this space.
- Balance: Using the balance from the line above, add your most recent deposit or subtract your most recent withdrawal.
Your goal is to maintain a positive balance above the required minimum balance so that you don’t bounce your check and avoid an account maintenance fee.
How to Balance a Checkbook
Every month you will get a statement from your bank. When you receive the statement, get your checkbook and check off (either in transaction type box or balance box) each item that is on your statement and in your checkbook.
If there are items on your statement that are not in your checkbook, add them to your checkbook register on your next open line. If there are items on your checkbook register but not on the statement, this means the bank did not clear the charge yet. Follow your checkbook register as that represents the correct balance once the charge does clear.
To confirm your balance, you will need to (on a separate paper) withdraw any charges from the checkbook register balance that has not yet cleared. If the two balances match, your checkbook is balanced. However, if there are different numbers, you will need to do some more digging because you probably forgot to include a charge or considered something cleared that had not yet cleared.
Learning how to work with a checkbook is an essential financial skill, so be sure to follow these guides and learn how to manage your checking account properly.
Craig Ford is a fulltime missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.