This post may contain affiliate links. You can read my full disclosure here.
I worked at a bank for 2 1/2 years and was surprised by a few things I learned there.
To be honest, I never went into banks much my entire life. I would usually use the ATM to get cash and deposit checks. And of course now most banks offer a way to deposit checks right on your phone and many of us don’t even use cash.
Yet there are still some people that go into the bank often. And after having worked at one, I do see more reasons to actually use them.
But this isn’t a post to promote banks or going into them, but rather, is about some interesting things I learned by working at one and how we can all be better money managers by what I learned.
I think whether or not you are one of those people that never goes into a bank or goes in often, you can also learn some things from my experience that will help you save money in the long run and be a better money manager.
This post was updated February 11, 2019.
1. You must balance your checkbook
Some people will disagree with me on this one but I think balancing a checkbook is absolutely essential. This means both keeping a checkbook register and then actually reconciling it at the end of the month.
Now, just to be clear, when I use the term checkbook, this doesn’t necessarily have anything to do with whether or not you write checks. It used to, but in this day and age, most of us use debit cards instead of write checks.
So let me explain why I think this is so important.
I saw too many people incur overdraft fees simply because they were mistaken about how much money they had in their bank accounts.
Most people think they can just look online to know how much money they have at the time they want to purchase something, and while this is true to an extent, what you see online does not always tell the whole story.
Here are some reasons why it is better to trust your own checkbook register rather than simply what you see online:
A couple of years ago I had given my rent check to my apartment company on time. If I remember correctly, it was a little over two weeks before they finally deposited my check.
Working at a bank, I often looked at my account on a daily basis and one day I saw that the check was suddenly pending in my account. I had completely forgotten it was still out there! Since the time I had given them my check, I had spent too much money to cover the amount, which meant once the check was no longer pending and would actually post to my account, I would be charged a $33 overdraft fee.
Luckily, I had an account at another bank nearby, so on my lunch break I went to that other bank and pulled out some cash to cover my rent check. Had I not done that, or not had the extra cash, I would have been paying fees that I never would have had to pay had I realized the rent check had not yet cleared even a couple of weeks later.
This is the moment I started to keep a checkbook register and I haven’t looked back since.
I saw this happen over and over again while working at the bank: checks suddenly cashed long after they were written. Sometimes a check would be deposited a year later!
Do yourself a favor and pay attention to what outstanding checks you have on your account so you do not end up overdrawing your account once they are finally cashed.
You can do this by keeping a checkbook register. The balance in your checkbook will always be short the amount of the outstanding check so you think you’ve already spent the money.
There are many checkbook register apps, which make it very easy to keep track of your finances and figure out an error should you find one when you balance.
Preauthorizations can be very frustrating for people.
This is when a bank puts a hold on a certain amount of money until the merchant clears the transaction. This is often to verify funds.
Sometimes this hold is for the full amount of the purchase and other times it is a different amount.
Gas stations are notorious for this. You may have purchased gas before and saw that there was a preauthorization for only $1 for a couple of days. It isn’t until a few days later that the entire amount shows up.
I have even seen gas stations have 3 transactions for the same purchase on hold at one time, all for different amounts and for a total higher than the purchase.
Often these preauthorizations, whether the full amount or not, show as a hold on your account and then eventually “fall off” until they are posted to your account. This “fall off” period can last an hour or a few days.
We had a client come into the bank one time to inquire about how much money she had in her account. The teller told her exactly what he was able to see in our system.
She then went shopping and ended up overdrawing her account.
What happened is that she came into the bank during the time that a preauthorization for a purchase fell off and before it was posted to her account. So she thought she had more money than she actually did.
Of course she blamed us for this thinking we did not give her the correct balance on her account, and in way I can see why she would think that. But the bank teller could not see that any preauthorization fell off and had no way of knowing a transaction would get posted to her account later that day.
Had she kept track of her own finances, she would have known her exact balance.
Automatic bill payments
Although I understand the convenience of automatic bill payments, I am not necessarily a fan of them.
There are only two reason I would suggest to anyone that they even use them:
- The merchant offers a discount for using it
- You have a bad history of paying bills on time
The reason why I don’t like them very much is because it is so easy to forget that a bill payment will be coming out of your account soon, so you check your account balance online and although it shows that you have $700, you forget that your large car payment will be deducted in a day or two and so you end up spending what should go to your car payment.
By keeping a checkbook register, you will have already indicated that the payment will be coming out of your account before it ever happens, letting you know exactly how much money you have to spend.
Unfortunately, fraud is such a big issue and I saw it happen so much while working at the bank.
In short, fraud is often when someone gets a hold of your credit card, debit card, or bank account number, and uses those numbers to make purchases.
When this happens you feel violated. But please know it happens to so many people. It is very rarely yours or the bank’s fault – these people are just really good at what they do!
By keeping track of your own finances, you will have a better idea if fraud occurs on your account. If you suddenly notice a purchase at Chipotle from a couple of weeks ago that you think you didn’t make, but you can’t really remember for sure because you eat there all the time, then you can’t really argue the purchase. By being able to look back at your checkbook register you will know.
If you suspect fraud on your account, go into your bank and let them know. They will most likely have you sit down with a banker and have you file an affidavit.
Yes, bank tellers are human and do make mistakes. Account numbers can get reversed, check amounts can get entered incorrectly, and some transactions can get lost in the mix.
This doesn’t happen often, but it certainly can happen.
Avoid getting into trouble by this by keeping track of your finances. It’s also a good way to be able to go back to the bank and show them what you think you should have in your account if there are any issues.
#2. A lot of people don’t really understand checks
Checks aren’t in circulation nearly as much as they used to be. So it makes sense as to why there is confusion over them.
Here are some tips to help understand checks better:
If you bring a check into a bank that someone else wrote, please do not ever write on the check
Often, the only place you should write is on the back of the check when you endorse it.
Every bank is different so if there is an error on the front of the check, the bank may allow you to cross out the error and correct it. But please don’t ever do this before you bring the check in. This is still is no guarantee that the bank the check is drawn on (the person’s bank who wrote the check) will not return it. If the check does get returned by the other bank, you will likely be charged for it.
If there is an error on the front of the check, you safest bet is to have a new check written if possible.
The written amount of the check is the legal amount
It used to really surprise me how often the numerical amount and written amount on a check would be different. This would frustrate some people trying to cash a check because the legal amount of the check is the written amount, not the numerical.
If you are writing a check, or receive one from someone else, always inspect the check to be sure both amounts are correct. If they are not, rewrite the check or try to have the check reissued to you.
An unsigned check is not legal
Quite often we would get unsigned checks trying to be cashed or deposited. Depending on the amount of the check, we might have still tried to put it through. But again, there is always the risk the other bank will return it.
Issues with who the check is made out to
There was often a lot of confusion when a check was made out to two people.
If it is written out to two names with the word “or” in between, such as “Julie or Michael Smith,” then either of those people can cash the check. It can also be deposited into an account in only one of their names.
If the check is made out to two names with the word “and” in between, such as “Julie and Michael Smith,” then there are a few options:
- Both people need to be present to cash the check. This would often upset married couples because they would have a joint account in both of their names and only one of them would come in to cash the check. Because the bank has no way of knowing if the couple is in the middle of a divorce or trying to hurt each other, it is usually still required that both parties are present. Joint accounts to do not mean you have free reign to everything.
- The check can only deposited into an account with both names, unless the person is present to authorize the check being deposited into an account not in their name.
- One person can be present, as long as the other person not present also endorsed the check (this may depend on how lenient the bank is and how well they know you). The bank will check the signature of the endorsement from the person not present to be sure it matches what is in their system.
With all of these things, some banks may be a little more lenient than others and it also often depends on how well the bank knows the client.
It is a good ideas to wait until you get to the bank to endorse a check in front of the teller. Of course this so rarely happens. But it can be helpful for the teller to watch the check being endorsed so they can compare signatures.
The check should also be endorsed in the same way it is written out on the front of the check. So if it’s written to Mrs. Smith, it should be endorsed as Mrs. Smith and then the bank would most likely want the full name signed underneath.
Endorsing checks over to someone can also be tricky. This when someone will write on the back of the check, “endorsing over to Sue Smith.” If you are going to endorse a check over to someone, or they to you, you both need to be present when you go into the bank.
Too often we would have people come in with a check endorsed over to them, but without the writer of the check present, which means the bank has no way to know that the check was not found laying on the street and the person trying to cash it signed it over to them self. We want to believe everyone has the best of intentions, but this is not always the case.
#3 The bankers are there for a reason – use them!
The bankers are there to help you and not enough people take advantage of that. Most of them consider themself your financial advisor.
Every once in a while, it is a good idea to sit down with a banker and review your accounts. There could be new accounts that would benefit you more than what you’re currently in, or a banker may even be able to make some suggestions that will help you manage your finances better, earn some more interest, or overall improve the condition of your accounts.
Many bankers will even help you balance your checkbook if you can’t seem to get it balanced.
#4 Not every bank operates in the same way
You can walk into a bank and say that your old bank used to do things a certain way, but that does not mean your new bank will also do things that way.
Some banks are a lot more lenient while others are more strict. It is never a good idea to assume all banks will do things the same way.
And remember, your bank is not only protecting itself, but is protecting you as well!
#5 People get upset when you ask for their ID
Of all the things that surprised me by working at a bank, the biggest thing is when people would get upset when I would ask for their ID.
This would happen all the time. And I don’t understand why!
Why in the world would anyone want to risk having someone else transact on their account?
Those that got upset the most were those that had been banking with us for decades. In a way I get that; so often they walk in to a branch and are known by name. But most of the people working at the bank have not been there for decades, so refusing to show an ID and saying “I’ve been banking here for 30 years and they know me at this other location” is not very helpful for anyone. And of course there were those that would name drop higher ups.
So please don’t do this! Just like I mentioned above, it’s not only for the bank’s protection, it’s for yours too! No one wants someone walking into a bank and pretending to be you and taking out all of your money.
#6 Know and understand checking and saving account restrictions
Most checking and savings accounts have certain restrictions. A banker should go over these with you when you open your accounts. Please do not get mad at the bank because you forgot you can only transact on your savings account three times a month and you ended up incurring fees.
If you need to, review your account terms often so you don’t get charged any unnecessary fees.
I believe these 6 things I learned about money from working at a bank can help you be a better expert money manager. All of these reasons are very important to pay attention to so you do not end up losing any money in fees, fraud, or any other reason.
Do you have any tips to help us be better money managers? Please comment below!
5 Tips To Help You Stick To Your Budget
How To Save Money By Avoiding These 5 Common Bill Paying Mistakes
What To Stop Buying To Pay Off Debt And Save Money Faster
How To Get Your Spouse On Board With Your Financial Plan