YNAB BLOG

Reason #297 I Love Budgeting: When Someone Finally Cashes a Check I Wrote, It Doesn’t Wreck My Day

stethescopeAbout six weeks ago I wrote a $400 check to a doctor. He must have stuffed it in the glove box of his BMW*, because weeks past and the check didn’t post to my account. I actually started hoping he’d lost the check (don’t judge me), but a few days ago the check finally cleared and the $400 left my bank account.

So, who cares? Well, in my pre-budgeting days, this is how it would have gone:

1. I write the check.

2. I forget about it.

3. Doc stuffs check in glove box.

4. Weeks pass as I go on living my paycheck-to-paycheck, close to redline life.

5. Doc’s auto detailing guy finds check in glove box, gives it to Doc, who finally deposits it.

6. Check overdraws my checking account; I say bad words (hopefully under my breath if the kids are around).

Thanks to budgeting (with YNAB), it goes like this instead:

1. I write the check and record it in my checking account register (in YNAB).

2. I forget about it.

3. Doc stuffs check in glove box.

4. Weeks pass as I go on living the budgeted life.

5. Doc’s auto detailing guy finds check in glove box, gives it to Doc, who finally deposits it.

6. I notice the check has posted, mark the transaction as “Cleared” in my budget (which updates my cleared checking account balance, but not my working balance**), and go on about my day.

That’s budgeting bliss. Fewer surprises, fewer bad words, and less stress.

*He actually did drive a BMW, but I made up the part about the auto detailing guy. Is it really that big a stretch?

**If you’d like to learn the difference between “cleared balance” and “working balance”, take a 34-day free trial of YouNeedABudget. You’ll be glad you did.

18 Responses to “Reason #297 I Love Budgeting: When Someone Finally Cashes a Check I Wrote, It Doesn’t Wreck My Day”

  1. Jodie

    I just had a similar moment this morning. Wrote two checks last month (which I hardly ever do, but had the furnace cleaned and paid for my yoga class) and this morning I realized they still weren’t cashed. But it didn’t matter! It’s in my working balance already. It was such a great feeling to know I had that $180 sitting there for whenever they cash the checks.

  2. Marie

    The other day I told my brother that I usually wait a week until depositing my client’s checks. My brother was upset with me. I told him about YNAB and why I didn’t see a week to deposit checks as a big deal, because it wouldn’t be a big deal for me. Now I understand my clients better from my brother and this blog. I should probably deposit their checks sooner.

    • mark

      Yep – you’re probably right. Unless your clients have a real handle on their finances, waiting even one week to deposit the check might shock them. Unfortunate!

    • Annalise

      I used to wait until I had a bunch of checks from my piano students, then make a trip to the bank to deposit them all at once. Now, however, my bank offers mobile deposits from my smartphone. I love this feature, and am able to deposit each check the day (or close to) I receive it. My kids are the only ones upset, because they don’t get lollipops from the bank tellers anymore.

    • Melissa

      I have friends who take FOR.EV.ER. to deposit checks, and even though it’s entered into YNAB, I still get annoyed. Those people get paid in cash everytime. I just hate writing checks. I have to write one to FedEx to pay a customs fee because they don’t have online payment. FEDEX DOES NOT HAVE ONLINE PAYMENT.

      I also used to hate being paid in check, because then I had to make the effort to get my money back after I made the effort to loan it in the first place. Now, with mobile deposit, I let people pay me in check again because I don’t have to physically go somewhere to deposit money anymore.

  3. Mark DeNio

    Marie, I wouldn’t change a thing. You’re being a better example for them by not needing the funds right away.

  4. Mark DeNio

    I am going through this but for a different reason. I bought a membership to an online service. According to theservice I’m in good standing with them but the debit card purchase was never posted to my account. Waiting until I have the money to pay them with before I bring it to their attention.

    • Charlotte

      Checks become “stale” 6 months after the date written on them. The bank can choose not to cash it at this point.

      For more, see: http://www.fdic.gov/regulations/laws/rules/6500-3225.html

      “The fact that a check is deposited more than six months after the date on the check (i.e. a stale check) is a reasonable indication that the check may be uncollectible, because under U.S.C. 4–404 a bank has no duty to its customer to pay a check that is more than six months old.”

      • Jennifer

        The key word is “choose”. Most times, the tellers or back office personnel are not checking the dates on the checks so they can still go through even after 6 months.

  5. Julie Hart Davis

    I have two outstanding checks in my register just waiting to be cleared (checks to school which my daughter probably misplaced on her way to give to the teacher, but she can’t be sure). I wonder how long is long enough to wait before I rebudget those funds? Anyone? They aren’t a big deal, both because I have the funds budgeted and they are for small amounts, but I hate having those uncleared checks just sitting there!!

    • Rebecca K.

      I’ve waited a year before rebudgeting funds — the banks will typically cash a check as long as it is dated within a year of the date written on it. After that, they may or may not consider it “stale”, but it can definitely still be cashed.

    • LeiraHoward

      Have you tried contacting the teacher to see if she did get the checks?
      Did you write a second check for the same expenses?
      If so, you should probably contact the teacher, inform him/her of the situation, and request that if the checks do turn up, that they be returned to you.
      Other than that, check with your bank for their policy. Many will not cash checks after 6 months, so that would be your date to rebudget those funds.

  6. Jill Jeffers

    Just wanted to finally say thank you for your posts. I read them religiously, and they help to keep me focused on my budget and goals. Your emails go into my family-and-friends priority list. I am always entertained and always find something useful to apply or think about. Your candor is amazing and so helpful. Just wanted to say you do fantastic work. Love YNAB so much. I’ve been using it for months now. I wish I’d found it way sooner, but the decades-long search for a sustainable system that actually works is finally over! I recommend it to everyone. Thanks.

    • mark

      Wow – thanks Jill! Glad you’re finding YNAB (and the blog) useful.

  7. Micro

    I always have the money on hand but I find it annoying to just have a check waiting to clear. I just prefer knowing the transaction is over and done with.

  8. Erin

    I adopted a dog in early May, and wrote a check for the adoption fee to the rescue. Recorded the check in YNAB and went on…the check didn’t clear but I knew the money was spent. In late July, the woman at the rescue sheepishly called me – she had accidentally put my check in a pile of papers to be shredded and would I mind sending another? Didn’t bat an eye. Thanks, YNAB!

  9. Hannah

    Yup, so nice. I wrote a check for $50 to someone in July and it still hasn’t been cashed. It’s annoying, but at least I don’t have to worry about not having the funds now.

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