Banking 101

When you write a check to someone, that is a promise to pay.  It’s not a promise to pay if, and only if, the other person cashes the check soon enough to suit your fancy.  It is a commonly held belief that a check expires after a few months, but (a) that’s not true and (b) if it were true, it wouldn’t relieve you of your promise to pay.  If you write a check to you landlord, and he loses it for a couple of months, that doesn’t mean WOO-HOO, PARTY ON!  FREE RENT!!!!!  It means that you should have a lot of money in your bank account that doesn’t belong to you, and you need to write another check.

To that end, let me explain how banking works:

1. You put money in the account.  That amount is entirely up to you.
2. When you make a purchase, you write down what you bought, when you bought it, and how much you spent.  You then deduct that amount from the total funds available to you.
3. When you write a check, do the same.   
4. When you make a deposit, write it down, and add the balance to the total funds available to you.
5. When you want to buy something, look at the balance in your own records to see if you have enough money to buy what you want.  Do not just look at the bank’s balance.  The bank doesn’t know what checks you have outstanding.  The bank doesn’t know that you bought a super cute sweater just before the stores closed last night and the merchant hasn’t processed the transaction yet (Remember - they don’t forfeit their right to the money because they didn’t claim it instantly).  Do you know who does know those things?  You do.  Pay attention.
6. Every so often, check to make sure the bank’s records match yours.  Banks sometimes make mistakes.
7. Repeat steps 3-6 as necessary.

You know what’s not in there?  “Assume you get to keep money because it’s there and someone else didn’t withdraw it at as fast as they should have if they really wanted it, those suckers!”  Because that’s not how it works.  In most states, it’s a crime to write a check that doesn’t clear.  If someone comes to you with a check that was returned for non-payment and says, “Hey, this check didn’t clear, so you still owe me money,” and you respond with, “Too bad, so sad, sucker!  You were too slow!”, you could be criminally prosecuted for theft.  This scenario shouldn’t be a big deal.  If I write a check to pay my rent for $1,000, and it doesn’t clear the bank, I should have $1,000 too much in my account.  Since I’m not an idiot, I should be able to guess that the gods of money didn’t just put that $1,000 in my account because I’m so cute and witty.  I should be able to figure out why that $1,000 is there, which makes it pretty obvious that I need to leave it in my account until the check clears.  Sometimes, gratification is not instant.  It’s annoying to see money in the bank that you can’t spend.  I once had a friend wait an entire year to cash a $12 check.  It irked me every time I balanced my accounts.  Because I’m an adult, I told her to cash the check.  I didn’t spend the $12, refuse to pay her, and then scream and cry when she overdrew my account by trying to cash it because the money wasn’t there.

Some states have some pretty low amounts to convert a misdemeanor to a felony, so you better hope you don’t live in one of them.  If you make good on a bounced check, well then, you made a mistake.  That’s not an asshole thing to do - it happens.  But if you refuse to pay, or can’t, because you spent the money on something else, that’s evidence of fraud.  You don’t want that.