When I met my husband some years ago (before Quicken), I was surprised to discover that he balanced his checkbook by rounding. He would enter “$50” if he thought he had spent about that, and figured he would be safe from overdrafts if he always rounded up his entries. But I, being rule-bound, made a great effort to keep my checkbook accurate to the cent. These two tactics seemed like case studies on our different personality types, and I, of course, considered my approach superior. It took me years (and the advent of Quicken and online banking) to turn-over bill-paying to him. Now I find his early checkbook balancing tactics are increasingly popular with young adults.
Recently I learned that young bank-account holders often pay for everything with debit or credit cards, and balance their checkbook passively, by checking their online bank accounts via smartphone whenever they want to know how much money they have left. Or they may set up alerts to let them know when their account drops below a certain limit. Bank of America offers this Money Management tip to new account holders, “You can use Mobile Banking when you are on the go to check your account balance before making purchases…(but) don’t forget to subtract from your available balance…any online payments that are scheduled in the future but not yet deducted by your bank.”
Additionally, some young banking customers are relying on the “round-up” system my husband pioneered. In his US News Money report, “5 Reasons Why Debit Cards Trump Credit Cards,” Jim Wang advises, ” While credit card usage lets you build points towards some specific reward that always seems outside of your reach, using a debit card is a great way to save actual money. Many banks and other financial institutions have a “round-up” system you can allow to affect your account. Basically every time you spend, the remaining cents in the final cost—say the 45 cents in a 1.55 purchase—will be allocated for your savings. You’ll see a deduction for a flat $2.00 of which 0.45 went to your savings account. Factor that with multiple purchases and it really adds up.”
This triggers the same kind of question I had years ago, “Is mobile checkbook balancing trendy and smart, or naive and lazy?” I guess the answer is still the same… it depends on your personality type. In his Money Relationship blog, author Adam writes, ” Personally, I have never really balanced my checkbook…For the past several years, I have used Quicken on a daily basis. It automatically gets my transactions for me and I don’t have to worry about writing them down…. My fiancé still religiously balances her checkbook. I always see her doing it every week and it makes me cringe every time. She is always like 1 cent off somewhere and she goes nuts trying to find that penny.” So the coin flips both ways! If you’re not sure, just look at the range of comments to his blog – from nonchalant to uptight. Like much else in life, money management styles are a personality thing.