Financial Planning: Balancing a Checkbook

1. Financial Planning: Balancing a Checkbook

2. Financial Planning:

3. Pretend you opened a checking account on October 1st and put $100 in your account. • On October 4th, you deposited $50 more. • You wrote a check to your brother/sister for his/her birthday for $125 on October 5th. He she put the check in his/her desk and forgot about it. • You use your ATM card at Wal-Mart to buy a DVD on October 7th. The amount was $25. • On October 20th you check your account balance at the ATM. It shows you have $125 in your account. Checking Account Simulation

4. Checking Account Simulation Balance: $125.00

5. On October 22nd you use your ATM card to buy the following things: Checking Account Simulation Starbucks Coffee $5.00 Shoes at Kohls $25.00 Lunch at The Olive Garden $15.00 Movie Tickets at Cinema Star $20.00 Video Game at Best Buy $50.00 Total Spent on October 22nd: $115.00

6. On October 21st, your brother/sister finds the check you wrote and cashes it. What happens next? Checking Account Simulation Starbucks Coffee $5.00 Shoes at Khols $25.00 Lunch at The Olive Garden $15.00 Movie Tickets at Cinema Star $20.00 Video Game at Best Buy $50.00 Total Spent on October 22nd: $115.00 $35.OO Overdraft Fee $35.OO Overdraft Fee $35.OO Overdraft Fee $35.OO Overdraft Fee $35.OO Overdraft Fee $175.00 in Fees! $175.00 in fees + $115.00 in purchases $290.00 you owe the bank!

7. What is the lesson? • Don’t just depend on what the ATM says you have in your account. • You have to keep track of the money you deposit and withdraw from your checking account. Checking Account Simulation

8. Check Register 10/1 Deposit 100 00 100 00 10/4 Deposit 50 00 150 00 1234 10/5 John Doe – Birthday Gift 125 00 25 00 10/7 Walmart - ATM 25 00 0 10/21 Starbucks - ATM 5 00 -5 00 10/21 Kohls - ATM 25 00 -30 00 10/21 Olive Garden - ATM 15 00 -45 00 10/21 Cinema Star - ATM 20 00 -65 00 10/21 Best Buy - ATM 50 00 -115 00 10/21 Overdraft Fee 35 00 -150 00 10/21 Overdraft Fee 35 00 -180 00

9. Parts of a Check

10. Writing Checks October 5, 2010 John Doe 125.00 One hundred twenty-five & 00/100 ------------- Jane Doe Birthday Gift 1234

11. Writing Checks

12. Writing Checks The Wrong Way October 5, 2010 John Doe 25.00 9 Nine hundred twenty-five & 00/100 ---------- Jane Doe Birthday Gift

13. ENDORSE HERE: X _____________________________ ______________________________ ______________________________ Do not sign/write/ stamp below this line ______________________________ Endorsing a Check John Doe 8769871

14. Checks

15. Check Register

16. Bank Statement

17. Beginning Balance $250.65 • Check #1234 to Southern California Edison (SCE) for $80.33 on 9/1/10 • Payroll (Direct Deposit) of $295.00 on 9/2/10 • ATM Withdrawal of $100 on 9/4/10 • Check #1235 to Macy’s for $29.94 on 9/6/10 • Walmart debit card purchase of $15.22 on 9/9/10 • Check #1236 to Farmer’s Insurance for $22.05 on 9/11/10 • Void Check #1236 to Farmer’s Insurance (add $22.05 back in) • Check #1237 to Farmer’s Insurance for $22.50 on 9/11/10 • Payroll (Direct Deposit) of $254.33 on 9/14/10 • Check #1238 to Nuevo Water Company for $52.87 on 9/19/10 • Check #1239 to The Gas Company for $32.44 on 9/20/10 • Birthday gift deposit for $100.00 on 9/22/10 • Target Debit Card for $36.76 on 9/25/10 • Walmart Debit Card for $15.33 on 9/29/10 • Ending balance should be$514.59 Practice Entering Transactions

18. 250 65 Check Register 1234 9/1 Southern California Edison 80 33 170 32 9/2 Deposit – Payroll 295 00 465 32 9/4 ATM 100 00 365 32 1235 9/6 Macy’s – Lingerie 29 94 335 38 9/9 Walmart – Debit 15 22 320 16 1236 9/11 Farmer’s Insurance VOID 22 05 298 11 9/11 Farmer’s Insurance 22 05 320 16 1237 9/11 Farmer’s Insurance 22 50 297 66 9/14 Deposit – Payroll 254 33 551 99 1238 9/19 Nuevo Water Company 52 87 499 12 1239 9/20 The Gas Company 32 44 466 68 9/22 Birthday Gift – Deposit 100 00 566 68 9/25 Target – Debit 36 76 529 92 9/29 Walmart – Debit 15 33 514 59

19. Reconciling Your Bank Account √ √ √ √ √ √ 9/8 Withdrawal – ATM 100 00 414 59