Having a checking account is only the beginning to better money management. You need to keep track of your checks, deposits and cash withdrawals. Sometimes you can get overconfident with the amount of money you have and make some costly mistakes. Read the following paragraph and try to figure out what could have been done to avoid the mistake.

Carrie bought groceries she needed and wrote out a check to the store for $23.56. A week later, the store manager called her at home and asked her to bring $23.56 in cash to the store to pay for the groceries. The store was also charging her $15 more because her check was returned. Carrie was very embarrassed and confused. As it turns out, Carrie only had $15.79 in her checking account. The bank stamped the words “insufficient funds” on the check because there was not enough money in the account. The bank sent the check back to the grocery store. Later in the month she also receives a bill from the bank a $10 fee for the “bad” check.

How to Keep Track of Your Money

Every time you write a check, you should record it in a check register. A check register is a small chart where you record the checks you write and the deposits you make. Notice the part of the check register marked “balance”. The balance is the amount of money in your checking account. Every time you write a check or make a deposit, your balance changes. When you write a check, you must subtract that amount from your balance. When you make a deposit, you must add that amount to your balance.

BE SURE TO DEDUCT ANY CHECK CHARGES OR SERVICES CHARGES THAT MAY APPLY TO YOUR ACCOUNT
Number	Date	Description	Amount of Check/ Withdrawal/Purchase	Check Fee	Amount of Deposit	Balance

Carrie shouldn’t write a check for more than $36.30. That is all the money she has in her checking account right now. This will avoid any chance of any check “bouncing”.

How Savings Accounts Work

If you try to save your money in a drawer at home, you might spend it. If you put your money in a savings account at a bank, it won’t be so easy to spend. Banks almost never charge fees for having a savings account. All banks must pay interest on savings accounts. It’s the law. For example, a bank might pay 5 percent interest on a savings account. If you put $100 in this savings account and left it there, you would earn $5 at the end of a year. The longer you leave money in a savings account, the more interest you will earn. However, you probably shouldn’t put all your money into a savings account. You cannot write a check on the money in your savings account.