Thursday, October 27, 2016

Don't Teach Your Kids How To Write Checks

Checkbook Turning Digital

A basic check writing unit is a staple of the traditional high school personal finance curriculum.

I say ditch that unit.

I don’t care if my kids never learn how to write checks.

Why? Almost all of the overdraft fees incurred by my older two kids were due to hand-written checks. A forgotten check cashed late. A remembered check cashed unexpectedly early.

Whenever there’s a significant delay between payment being initiated and funds being withdrawn, there’s a financial accident just waiting to happen. Especially for those who don’t maintain healthy buffers in their accounts. Like your teens.

That nefarious pay-now-withdraw-later delay exists with checks, and it exists with credit cards. That’s why inexperienced or stretched consumers struggle with both. That’s why banks love both. Cha-ching.

Hand-written checks are nothing more than a gateway to bank overdraft fees. No thanks.

So, what if my kid has to pay someone who only accepts a paper check? (Lame.)

I teach my kid how to use online bill pay instead. The bank handles cutting the check and withdraws the funds promptly. No delay. Nothing to remember. No timing games to play. No overdraft. No worries.

You say: “How can my kids be financial grown-ups if they don’t know how to write checks?”

I say: Grown-ups don’t write checks, Luddites do.

P.S. Your teens should ditch cash too. Except for a little backup stash in the shoe.

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