Checking account

At the core of each budget space is one checking account. This is an account that you open at a bank, credit union or online bank. You deposit money into this account for both safe keeping and to make the money conveniently available to you as cash, for making payments or to transfer money to other types of accounts.

The name “checking account” is a relatively modern term. The practice of writing instructions on a serialized piece of paper to access money held by a “cashier” first appeared in Holland in the early 1500s. That practice spread and eventually became the modern checking account with preprinted, serialized checks being issued to the account holder who used a check register, a hand written, preformatted log or journal, to keep track of checks that were written as well as other account transactions. The check register is how a person kept track of how much money, the account balance, was available for their use. A check register was needed by the account holder because the account balance maintained by the bank did not usually include the checks that had not yet been received and processed (cleared).

With the advent of computers and the Internet, the name “checking account” for many may seem out of date. With each new generation the idea of writing checks to make payments or withdraw cash from their checking account is losing ground to electronic methods. For example, a debit card, which is fundamentally a reusable, plastic check, is used instead of writing checks. Automatic teller machines (ATM) continue to be a popular way to withdraw cash. And transferring money online is easy with services like Venmo and Zelle.

The check register is disappearing as well. It is either not used at all or is replaced with a computerized version such as a spreadsheet. The practice of manually keeping track of checking account transactions has been abandoned to the point that the term “check register” no longer appears in the vocabulary of younger wage earners. They have no idea what a check register is. In addition, the name “checking account” is beginning to morph into “debit account” reflecting the increased use of debit cards.

Regardless of how you might handle it, your checking/debit account is the “hub” of your day-to-day personal finances. It is the one place through which your money flows from the sources of your income to the monetary destinations that you choose. And it is this flow of cash from income source to final destination that you manage with A Real Budget.