Thanks For The Check, Grandma. How Do I Turn It Into Cash??

Has someone ever given you a check, written on paper? Did you know what to do with it?


The traditional thing to do is take it to your bank, endorse it, and give it to a bank teller. The teller can than either give you the cash or deposit your check into your account.


How do you endorse a check? Turn it over and at the top of one end will typically be some lines for you to sign your name. Sign it just as it was made out. Then hand the check with your ID to the teller if you only want cash. If you want it put in your account, fill out a Deposit Slip which the bank will have on hand. You'll need your account number. If the check is made out to more than one person, then everyone needs to endorse it.

There may still be times when you need to write a check in payment for something. How do you write a check?
Make out the date, who it's to, and then write the amount in numbers. Then 'write it out' using words. Cents are written as below: 45c is 45/100.  Sign the check. In the 'memo' line you can note what it's for, or put an account number if it's to pay a bill.

Parts of a check

The Routing Number identifies your bank. Eventually this money will be 'routed' to the 'home' bank.

The Account Number is your personal account.

What about depositing a check online using your computer or phone?


On the phone, you'll need the app from your bank (if it offers this service). You follow their directions, but generally, take a picture of the front and the back, upload those pictures, and tell the bank which account to place this money in. Some basics here: https://www.consumerreports.org/cro/magazine/2014/10/pros-and-cons-of-mobile-check-deposit/index.htm

Sometimes, your bank may hold the whole check for a few days to be sure it 'clears,' or that it's a good check. Ask about that, because you don't want to make a purchase thinking your account has that money in it only to find it wasn't credited yet.


After a couple of weeks after the check was successfully deposited, shred it so that no one can attempt to cash it again.


Are there any problems with depositing a check this way? Yes, there are some to think about: https://money.usnews.com/money/personal-finance/articles/2012/10/09/how-to-deposit-checks-with-your-smartphone


Some other tips about banking:
*Set up online banking so that  you can check your balance and which expenses have been taken out (checks cashed, online bills paid) and which deposits have been credited. Go to your bank's website and follow their directions. Check your account daily: if anyone hacks into it, you'll see it early on.
*Assuming you have a checkbook, use your check register to write down all the times you use your account, whether it's just for your debit card, or if you write checks sometimes. It's one way to track where your money goes, and it gives you the numbers to check and see if they match your account online.

*Use different passwords for different stores/services. If you use the same password for everything, that will cause a major headache if someone discovers it and can get into your checking account and/or credit cards.
*Be sure you know if the ATM you are using charges a fee. Those who honor your bank's card will not charge any extra to use it.
*You may need to actually go to the bank once in a while. Do you know where it is, and what their hours of operation are? Not every bank is open evenings.
*Just because your bank offers you a credit card does not mean it's the best deal you can get. Shop around for the lowest interest rate and other fees. They are often hidden in 'the fine print,' literally tiny words that are hard to read. All credit cards charge fees for various things, like an annual fee which can be $50 or more.
*If you sign papers for a credit card, you will then have that credit card until you cancel it, whether you use it or not--and you'll pay their yearly fee (if they have one) whether you use it or not.
*You can set up automatic bill paying from your account. That way, your bills will be paid on time...but if you sometimes run low in funds, you may want to pay the bills yourself when you are ready.
*An overdraft is when you write a check for more money than you have in your account. Ironically, most banks now charge you $35 every time you do that......which comes from an account that's already empty. Usually you won't even know something got messed up until you already have several of those $35 charges on your account. When you try to cash a check without having enough money in the account, it may come back marked "NSF," which means Non Sufficient Funds.

*If you are under 18 you may need a parent to co-own the account with you. This means that your parent can observe any account activity, too.


Checks are used less and less, but it's good to know how they 'work.' Especially if you receive one!

How to Adult: Wait, What Happened to My Pay Check?

Here's an interesting video featuring college seniors and what they know about 'real life,' particularly where their money is going to go, now that they're about to launch their careers....Even a Business major didn't know most of them.


https://www.bing.com/videos/search?q=how+to+adult+&&view=detail&mid=7D8AF44E83099AF75C327D8AF44E83099AF75C32&&FORM=VRDGAR


Did you know what any of those were??
W-4 - This is the form you sign when you accept a job offer (any job, anywhere). It will indicate your tax filing status (single, married, with or without dependents) and that determines how much tax your employer will take out of your check. You may be surprised at how much you actually see on your paycheck. Your employer will withhold Federal and State taxes, Social Security (FICA,, Federal Insurance Contributions Act): https://www.paycheckcity.com/pages/article.php?page=what-is-FICA , amounts for medical and/or dental insurance, and possibly costs of life insurance you have opted for, possibly union dues, and your retirement plan, as well as savings you may have opted for. These costs can easily run over $200 or more per check. You can also indicate you wish a certain dollar amount to be deposited in a savings account at a bank or credit union, or a retirement account.

A Flex Account is money withheld from your check and put into an account to pay medical costs not covered by insurance. If you had a co-pay, or if you visited a dentist or bought new glasses, you could use your Flex Account to pay for it (it is your money).


As to savings, if you saved $100 a month for 10 years in a bank account at 2% interest, you would earn $13,394.09 with interest (as long as you never withdrew any money). Here is a calculator: https://www.edwardjones.com/preparing-for-your-future/calculators-checklists/calculators/retirement-savings-calculator.html

Every year, anybody who earns over a certain dollar amount ($10,000 for a single person and $20,000 for a married couple filing jointly) has to file their taxes, essentially telling the IRS (Internal Revenue Service) how much taxes they paid. The form you receive from your employer is the W-2 and it is supposed to be in your hands by January 31 of the new year. All the information about your pay from that employer is on that form. You will also get tax forms from any other source of income for that year. If you file your taxes and you have overpaid, you'll get a refund from the IRS.

401K-A form of retirement savings, with your employer also chipping in money. Here's an example, if you start young and save 10% of your pay and your employer also contributes (that's what a 401K is), see how much you might be able to accumulate: https://www.bankrate.com/calculators/retirement/401-k-retirement-calculator.aspx

                                 This assumes a return and employer contribution you may or may not receive---it's one example
Of course, it's not likely you'll stay with the same employer over that many years, but you will probably continue to earn the same or more salary wherever you work. 401K accounts can be 'rolled over' from one employer to another.


IRA-Individual Retirement Account (there are several kinds of these)
How it impacts you: If you start at a young age stashing away money in a retirement account, when you reach retirement age, you can have a nice pile of money for whatever you need: Bill paying, vacations, whatever... and you earned it yourself.

Credit Score: Three companies, TransUnion, Experian, and Equifax, track your use of credit and give you a score that reflects how well you handle credit. A score of 850 is the highest you can get, and 300 is the lowest, although 300-549 is considered low. The scores are based on how much money you owe, whether it's a new credit application, how long you have made reliable payments-they are predicting if you are a good credit risk. Sometimes, if you aren't a solid credit risk (if you haven't been great at handling credit or haven't had a credit card before), you can get a loan or credit card, but it will have higher interest rates, such as for a car or a house, or may have a limit how much you can charge.

                                                                                 Aaron.... what were you thinking??


Here is a calculator to figure exactly how much money you'll give the credit card company: If you owe $2,000.00 on a credit card that charges 18% interest, and you pay $35 a month, it will take you almost 11 years to pay it off (IF you never charge anything else). In the end you will pay them $754.43 in interest. https://www.calculator.net/credit-card-calculator.html?balance=2000&rate=18&minimum=35&payoffoption=0&fixedpaymentamount=35&ctype=1&x=52&y=22 

You can check your credit scores free, once a year. Be aware that your credit report and your credit score are two separate things. If you apply for a loan, you can ask to see your credit score and/or report from the lender.

HMO-This is a Health Maintenance Organization, which is a type of health insurance. You'll pay a monthly fee, and will also have a deductible and "copays" which means, when you visit the doctor you pay a smaller amount, like $30, and the insurance picks up the rest or a certain percentage of the rest.


PPO-Preferred Provider Organization, Another similar type of health insurance, but it will only cover specific doctors/clinics/hospitals. You will also have a deductible and co-pays with this type of health insurance.  With any kind of health insurance, you need to check and make sure your 'provider,' or doctor, is in their covered network.

Congratulations on your first 'adult' job, and welcome to all things confusing when it comes to your pay.