Five Good Reasons to Have a Checking Account

Checking accounts provide proof of payment, security, convenience and help people monitor and budget their finances

It wasn’t all that long ago that having a checking account was a given, since writing a check was often the only way to pay for goods and services. Spending habits have evolved, but checking accounts are more important than ever, providing proof of payment, payment security, ease and convenience, a way to monitor spending and assistance with budgeting.

Proof of payment

Checking accounts are the ultimate paper trail. Not only does the user receive a monthly statement of checking account activity, checks can also be documented in one’s check register (checkbook) and via a carbon copy for those using duplicate checks. Moreover, most financial institutions will store an electronic image of every check and can make it available upon request.

“Checks provide a paper trail or written proof that you paid someone,” notes the EverythingFinanceBlog.com. “Each time you write a check that ultimately clears your account, there will be several records of it. Having this proof is important for tax purposes (when you make tax deductible charitable donations) and whenever you are paying a person or company by mail.”

Payment security

Checks are, of course, a secure way to send payments through the mail, as they have been for centuries. While money orders provide another option, they are more expensive, require a visit to a financial institution or other issuer and are less convenient if proof of payment is needed down the road.

Money orders pose “a paper-trail concern. While money orders can be tracked, it may not be as convenient as having the backing of the [financial institution] in the event your payment doesn’t make it to your creditor,” says MSN.com.

Ease and convenience of payments

Having a checking account also makes it easier to make electronic payments. “There are many ways to conveniently access your checking account that other types of accounts don’t offer” and, unlike savings accounts, “checking accounts have no Federal limits on the number of electronic transfers you can make each month,” from the website EverythingFinanceBlog.com explains.

Monitoring spending habits

Checks, checkbook registers and the monthly statements provided by financial institutions are all great ways to recall recent payments and gain a better understanding of your spending habits.

“If you spend only in cash and do not write down what you spend or where, you lose the ability to have accurate financial records for planning purposes,” adds MSN.com. “[An] account provides a monthly statement, which shows what you spend and where you spend it. These statements may be necessary at some point in your life, especially if you want to buy a home or qualify for a personal loan.”

Developing Healthy Budgets

Opening up dedicated checking accounts for either specific monthly spending needs or for certain members of the family provide an effective way of increasing frugality and meeting budget goals.

For example, husband and wife checking accounts that receive monthly deposits from a general family checking account allow each person to pay for the responsibilities that are expected of them with some room for fun and spontaneous spending that doesn’t go overboard.

“Husband Checking and Wife Checking accounts” give “each parent autonomy to spend however they see fit while still being held accountable for the overall budget amount,” the website FunCheaporFree.com says. “It motivates them to be frugal where possible” and will “help allocate spending responsibilities for a family, making ‘who is in charge of what’ clear and concise, and makes setting and maintaining a family budget much easier.”

There are a number of reasons to keep a checking account—or multiple checking accounts—including proof of payment, payment security, payment convenience and the ability to monitor spending habits and develop healthy budgets. Advantage One can easily add a checking account to your eCount. We also offer a host of online services that can make using your account a breeze. Visit us online, call us (734.676.7000), or drop by one of our branches for more information.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.
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