Aside from cash, checks were the most common form of payment for much of the 20th century. In fact, using checks for everyday consumer payments was so popular that “check” became virtually synonymous with “payment other than cash.” Balancing the checkbook also became routine procedure, as consumers would compare the figures in their checkbook registers against those in the statements that arrived in the mail each month.
Now debit cards have become the preferred alternative to cash, and paper checks are practically a thing of the past.
But should you still be balancing a checkbook?
Increasing Popularity of Electronic Transactions
In 2006, 33.1 billion checks were written. 27.8 billion were written in 2009. It’s no mystery what the figures from 2012 will show, even though they have yet to be released.
It’s a pattern, according to the Federal Reserve Bank of Philadelphia, who says the number of checks written has only been declining over the past decade. A study conducted by the Philadelphia Fed in 2012 shows this figure is falling by as much as 1.8 billion per year – a trend that, if continued, could eradicate paper checks altogether by 2026.
The data also shows a slow but steady transition to electronic transactions. It’s much simpler to swipe a card than to write a check, which explains the increasing popularity of credit and debit cards. An electronic transaction might also be safer, especially if a debit card requiring a PIN number is used, as compared to a check that readily shares a consumer’s name, address and account number with the recipient.
Electronic transactions save the U.S. banking system $1.16 billion a year, while consumers and businesses benefit by more than $2 billion from faster payment processing.
Maintaining the Balance
Following a shift to online and mobile banking, nearly one-quarter of account records were electronic in 2009.
However, balancing a checkbook, even without actually owning a checkbook, can be vital in the digital age. It’s so easy to mindlessly swipe and spend, which makes it all the more important to account for your expenses at the end of the week. It also serves as a checks and balances system to ensure everything is adding up (or subtracting) the way it should.
Without paper checks and a real registrar, consumers have turned to tools like Microsoft Excel to keep track of their purchases while maintaining a technology-centered lifestyle. Trent Hamm of The Simple Dollar logs his online receipts and itemizes them in Excel, then adds the figures posted in his online accounts for accuracy. Budget software programs also allow consumers to record transactions and balance electronic checkbooks, while personal finance apps like Mint give consumers the opportunity to effortlessly keep their transactions in order.
How do you prefer to keep your transactions in order? Do you still utilize a physical checkbook, or do you find it more efficient to use an electronic program? Share with us in the comment section below!
Photo courtesy CarbonNYC