Five checking account mistakes to avoid - $ and Sense

Black Enterprise, Dec, 2003 by Tamekia Reece

Face it. You'll need a checking account to run your enterprise. But before you find yourself in debt and out of business, check out these checking account mistakes and how you can avoid making them:

Mistake No. 1: Making frequent ATM withdrawals from other banks

Why it's a Mistake: This can add up to hundreds of dollars a year in fees.

Row to Avoid It: Make withdrawals at your bank only or use checks. Also, find a bank or credit union that doesn't charge a withdrawal fee.

Mistake No. 2: Bouncing checks

Why it's a Mistake: Getting hit with fees because of insufficient funds can deplete your account quickly, not to mention ruin your credit.

How to Avoid It: Keep good records and/or get overdraft protection on your account. You can also call the institutions you owe and explain that you don't have the funds immediately available. Post-dating checks is another option.

Mistake No. 3: Making mathematical errors

Why it's a Mistake: "It's surprising how often people add the checks to the balance instead of subtracting them," says the Tax Mama, Eva Rosenberg, who publishes a weekly e-zine at www.taxmama.com.

How to Avoid It: Balance your checkbook carefully. "Look closely at your check register. If your balance grows after you write a check, you're doing it backwards," says Rosenberg.

Mistake No. 4: Making automatic withdrawals

Why it's a Mistake: You may forget to keep enough money in your account to cover these payments and/or transfers. This can rack up a pretty penny in fees, too.

How to Avoid It: You could cancel all automatic payments and write checks instead. "Or get an electronic banking software program like Quicken or QuickBooks and enter your automatic payments for a whole year. This way, every time you look at your electronic balance, you'll be able to see what money is coming out and when." says Rosenberg.

Mistake No. 5: Throwing away bank receipts

Why it's a Mistake: Banks are prone to make mistakes. How to Avoid It: Save your bank receipts and compare them with your bank statements. You may also need your bank receipts for tax purposes.

By avoiding these costly mistakes, you'll save hard-earned cash, allowing your business to boom. Here are banks that offer services for teens:

Bank of America www.bankofamerica.com Chase Manhattan www.chase.com Washington Mutual www.wamu.com