Leaving Checking Account Dormant For Two Weeks In Anticipation Of First Paycheck
Monday, I’ll deposit my first paycheck of 2008. One of my goals for 2008 is to track every dollar that I spend. I haven’t used my checking account for two weeks, allowing for all checks that were written in 2007 to clear. After I deposit my paycheck, I can begin to track my spending, and I’ll know exactly how much I spend in a fiscal year.
I am reminded of the frustration I felt when I first started using a budget. I would sit down, write out my budget, but then, if I wanted to see my actual current checking account balance, I would have to wait until checks written in the previous month cleared the bank. Sure, the check amounts were already written in my checkbook register, but I wanted the actual checking account balance, in my account, to match, exactly, the balance in my checkbook register.
Eventually, I settled on letting the checking account sit, dormant, for a couple of weeks. During that time, all outstanding checks could be cashed, and my account balance would align itself with my checkbook register. For this two week period, we live ‘cash only’ – using the envelope system for cash management. (Click here to see a video I created, with step-by-step instructions for using the envelope system.)
My gym fees are auto-drafted from my checking account, and the auto-draft was scheduled for the two-week window. Just to simplify things a bit, I went ahead and paid my gym fees, a few weeks early, to avoid the auto-draft for that month.
Once my checkbook register and the checking account balance were the same, I began to make every effort to move away from paper checks. I now use online bill-pay, debit cards, and auto-drafts to pay 99% of our bills. We still write about 5 checks per month – and I’m looking for a way to make that number “0”.
Even if I move to “0” checks, there are times when my online bill-pay service will write a paper check in order to send a payment to a small company or individual. I have to wait until these checks clear before my checking account balance and checkbook register balance are equal. (There are some online bill-pay services that deduct check amounts when the check are written, but my online bill-pay service deducts the amounts when the checks are deposited/cashed.) These are the checks, the ones written by my online bill-pay service, that need to clear before I can begin my 2008 spending and tracking.