Can The Average Joe Save Money Without A Checking Account?

Ken Tumin | Sep 25, 2012 | 5,920 posts since 2009

I would not consider this as one of Yahoo Finance's best personal finance articles. In fact, I wonder if this might be a tongue-in-cheek type of article. However, since overdrafts have proven to be so profitable for the banks, it may actually be intended to be serious. Here are some of the interesting excerpts from this Yahoo Finance article:

In the last year, we have spent enough on bank overdraft fees to pay our rent for one month.
[...]
With a checking account it was so easy to overspend and accrue overdraft charges, which we grew to rely on.
[...]
I didn't realize how much stress would be lifted from my life once we got rid of the checking account.
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All I can say is that I hope the average American doesn't have this much trouble balancing their checkbooks.

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Answers

darkdreamer4u | Sep 26, 2012 | 224 posts since 2010

I never use a checkbook - how antiquated! Excel spreadsheet is the way to go: faster, more accurate and the 3s and 5s are different enough;-)

pearlbrown | Sep 26, 2012 | 2,299 posts since 2010

The story comes from the Yahoo contributor network, so it is a first-person "here is my story" article. Like you, Ken, I hope this type of thinking is not representative of how the average American handles a checkbook, but suspect it may be more common than we believe. What a sorry state of affairs.

There have been many lively discussions on this forum about our country's education system and the fact that many people can't do simple math without a calculator. The author of the article sounds like she can do the math ("Instead of spending around $750 a year on overdrafts, we can comfortably spend the $36 fee to keep the Visa") but may lack either the discipline or confidence to keep the check register updated.

If the person can't handle a checking account, then at least going to what amounts to cash-only (aside from the $36 annual expense for the Walmart VISA) is preferable. I shudder to think how they handle other financial obligations, though.

darkdreamer4u | Sep 26, 2012 | 224 posts since 2010

I guess like not every student is destined to go to college (all the bullcrap of the No Child Left Behind Act), not everybody seems to be able to handle a checking account - maybe they shouldn't...

paoli2 | Sep 26, 2012 | 2,394 posts since 2011

I have never had to pay Overdraft or any other checking account fees. However, our checking account was my biggest headache each month because I would always be out of balance by just a few pennies. It meant readding all the figures with my adding machine and always finding the error but a great aggravation until I finally realized what my problem was. It had nothing to do with lack of education because I have handled all manner of tax forms, book keeping and accounting all my life without a problem. However, I had a habit of scribbling all the figures in my checkbook and my fives and threes looked alike and caused me to add figures incorrectly. Now I have tried to write much neater in my checkbook and I hope to eliminate the problem. No matter how much education we have, if we don't pay attention to writing the figures clearly in the pad, we can have mathematical errors. I have been fortunate that my errors were always in the "pennies" so I never got overdrawn and had to pay any fees.

dunker | Sep 30, 2012 | 137 posts since 2010

I neither write checks nor use ATM machines. My rent is paid through bill pay. For just about everything else I primarily use reward checking debit cards (as credit cards) or occasionally credit cards when I can get 5% cash back. For my minimal cash needs I get cash back at grocery stores. I never have less than $10,000 in any account so overdrafts are never a problem.

And I regularly follow my accounts online, so I don't keep any written check tallies or spreadsheets of my individual expenses. Once a month I fill out a simple spreadsheet totaling each of my accounts so that I can keep track of my net worth.