Bouncing a check usually isn't intentional. Most people don't want to deal with the hassle and frustration that a bounced check can cause. Not only could you face multiple fees, but you may also be at risk of developing a bad reputation with your bank, which could affect lending in the future.
If you've bounced a check before, you're not alone. It's not uncommon to write a bounced check or two when money is tight, but it can be avoided by following the simple steps we've outlined below.
How to Avoid Bouncing a Check
- Balance your checking account regularly: Keep track of how much money is in your checking account by monitoring your deposits, withdrawals, and balance. Balancing your checkbook regularly, whether you do this once a week or even after each transaction, can help you avoid bounced checks.
- Check your account balance before writing a check: This is a continuation of the first tip. Check your balance to make sure you have enough in the bank to cover the check you're about to write. Remember to account for checks still outstanding that haven't been cashed yet. The funds left after they've cleared is what you have available.
- Budget so you don't overspend: People sometimes live above their means, spending more than they have coming in. Luckily, this can be avoided if you create a budget to track your spending. Choose a budgeting method that works for you and stick to it. As you continue to keep track of your expenses each month, you'll find that bounced checks may no longer be an issue.
- Eliminate automatic payments if necessary: It's easy to forget that $10 subscription payment that comes out automatically every month. If you find that automated electronic payments are a stumbling block for you, eliminate them. Most subscription services offer a manual pay option that you can plan for. You can also cancel any subscriptions that you don't use or need.
What to Do if You Bounce a Check
If you do happen to bounce a check, you can take the following steps:
- Contact Your Bank: As soon as you realize there are insufficient funds to cover a check, contact your bank. Explain the situation so that your bank is aware that the check will bounce.
- Contact the Payee: Call the payee and let them know the check is likely to bounce. This will keep them in the know and allow you and the recipient to figure out a mutual agreement for how you'll pay them, whether you will write another check or use a different payment method.
- Make Good on the Check: Get the funds into your bank account or cover the check with a cash payment to the payee as soon as possible. If you can't come up with the entire amount, set up a payment plan. Be up front about your situation to avoid any misunderstanding.
The Bottom Line
To sum it all up, using these methods can help you steer clear of bouncing a check. As long as you balance your checking account regularly, check your balance before writing a check, and work out a budget to control your spending, you'll be able to avoid the hassles and fees that come with writing a bounced check.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
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Original Source: 4 Tips to Avoid Bounced Checks
