how to bounce back from a bad check -...

How to Bounce Back from a Bad Check

...and stay financially healthy!

A financial training component of state statutes regarding issuing and passing a check without proper funding.

WorkbookDeveloped by BounceBack Services, Inc.

How to Bounce Back from a Bad CheckAnd Stay Financially Healthy

WORKBOOK

WORKSHEETS

Workbook — Financial Training for Checkwriters1Copyright @1999, 2004 BounceBack, Inc.

Worksheet #1CheckpointsThroughout your Financial Training textbook, you will be given answers consisting of different letters or numbers to fill in the spaces provided in the table below. Correctly completing these financial excercises is required to pass this program. The checkpoints are easy to fill in if you study the entire program.

Transfer these answers to your Training Verification Form. If you have reached the end of the program and not successfully filled in all of the ten checkpoints, you need to review your textbook one more time.

Checkpoint 1

Checkpoint 2

Checkpoint 3

Checkpoint 4

Checkpoint 5

Checkpoint 6

Checkpoint 7

Checkpoint 8

Checkpoint 9

Checkpoint 10 Bad Checks


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WORKSHEETS


Worksheet #2The Check RegisterIn the Check Register below we have filled in the following transactions:

We deposit $435.34 on May 11. This is a new account. There is no previous balance.1. We write check number 1001 to Family Market on May 12. We purchased groceries. 2. The amount of the check is $28.12.On May 14th we use the ATM to get $25.00 in cash.3. On May 16th we write check #1002 to Quick Lube for an oil change. The total comes to $15.65.4.

Continue to fill in the check register above with the following transactions:On May 17th we fill up the car at Joe’s Pump. The total comes to $12.91. We pay using check number 1003.5. On May 18th we use the ATM to get $20.00 cash.6. On May 18th we are going to the grocery store (Family Market). The total for groceries comes to $35.19. 7. We pay using check number 1004.On May 20th we deposit the paycheck ($563.95).8.

On May 29th we pay the rent ($433.12) using check number 1005.9.

What is the total amount in the account on May 20th after the deposit? ____________

Check Register

Balance Number Date Description of transaction Payment/Debit Deposit/Credit

0 00 5/11 Deposit 435 34 435 34 435 34

1001 5/12 Family Market 28 12 28 12 Food 407 22

ATM 5/14 Cash 25 00 25 00 382 22

1002 5/16 Quick Lube 15 65 15 65 Oil change 366 57


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WORKSHEETS


Worksheet #3The Real Cost of Passing a Bad CheckThe amount of the bad check is normally small in comparison with all the other fees and fines that you have to pay after passing a bad check.In the chart below, fill in the costs that you have had to pay for your bad check:

Normally there are also other costs, both emo-tional costs and hard “out-of-pocket” costs. Example: Stress in your relationship with your spouse, job related costs (absence due to court appearance, etc.) and other. List a few of the other emotional and expenses that you have experienced:

Worksheet #4 Reasons for Me Not to Write Bad ChecksIn your life there are many reasons for you to not write another bad check: For some people it is to be a good example to the kids. For some it is a desire not to break the law. For others it is to avoid the embar-rassment of being chased by law enforcement. For others it is to build a good credit report for the future. Write down your reasons for not passing a bad check:

Bank Charge for the Check Writer The bank will often dhare a fee to your account for the extra work you aare causing the bank because your check bounced.

$

Victim/Merchant Fee:In some states, the store can chare a fee for returned checks. This is normally posed in the store.

$

Fee to District Attorney:In most states, the district attorney will charge an administrataive fee for allow-ing you to pay the check prior to going to court.

$

Education Fee: Many courts and district attorney offices require offenders to take school pro-grams. There is normally a fee for these course and classes.

$

Court Costs: If you do not pay your check before your dcase goes to court, you most likely have to pay court costs. These costs vary, but can be over $100 even for small checks.

$

Warrant Fee: Some jurisdictions also charge a warrant fee in addition to the court costs.

$

TOTAL $


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WORKSHEETS


Worksheet #5Reconciling Your Checking AccountYou have just received your bank statement. It is now time to reconcile the checking account. Use the Check Register that you created in Worksheet #2.

Note that the bank statement says that there is over $800 in your account when there in fact is less than $500! All this is due to the fact that your landlord has not yet taken your rent check to the bank. At the time when you receive your statement that check has normally already cleared. When you are looking at the statement you have less than $500 in your account—not $800!

The ending balance in the bank state-1. ment is $862.42. Fill in the amount in the chart below at “Ending balance on bank statement”.All deposits are included in the bank 2. statement. Put a “0” in the chart below at “Deposits not included in the bank statement”The bank statement tells you that the 3. following checks and ATM with-drawals have cleared:

check 1001 ($28.12) • check 1002 ($15.65) check 1003 ($12.91) check 1004 ($35.19)

ATM on May 18th for $20.00.• ATM on May 14th for $25.00.•

In Worksheet 2,in the check register, 4. put a check mark over the amount of those checks and ATM withdrawals (put the check mark so that you can still read the amount). Fill in the number and the amount 5. of the check(s) that has not cleared (#1005) in the table belo at “Checks not in the bank statement”.

Fill in the total of all checks not in 6. the bank statement in the chart below where it says “SUBTRACT checks and ATM withdrawals not in the bank statement”Total the column.7. The bank has given you 75 cents in 8. interest. Write this amount in the table.The bank also charged you 25 cents 9. in fees. Write this amount in the table.Total the column to get the REAL 10. BALANCE. Transfer this amount to your Training Verification Form.


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WORKSHEETS


Worksheet #6My Financial StrengthsThere are bright spots even in the darkest financial situation. Those bright spots could be: “I have a steady job that pays $X”; “My rent is very reasonable at only $XXX per month”; “My spouse has a good job that pays well”; “In the past I managed to save money on a regular basis and I am convinced I can do it again!” Find your bright spots! In the space below, write down the bright sides of your financial situation:

My Financial Weaknesses Identify your biggest financial weaknesses and write them in the space provided below. Also write down a brief action plan. What are you going to do about these weaknesses? Examples of financial weaknesses: “I have a difficult time resisting temptation in stores”; “I can’t keep track of anything, including my finances”; “My rent is too high and I will never be able to keep up”.

My Financial Weakness My Action Plan to Change


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WORKSHEETS


Worksheet #7Check Your Financial HealthHow fit are your finances? Answer Yes or No to each question. Put a check mark in the box to indicate your answer.

Section AYes No 1. Do you have a clean and neat area to do your bills and your financial planning? 2. Do you have a savings account that you add to on a monthly basis? 3. Do you have an “emergency fund” of at least three months salary in a savings account? 4. Do you spend less than you earn? 5. Do you avoid major credit card purchases? 6. Are you spending less and less of your income towards paying debt? 7. Do you use your savings account only for major purchases and not for monthly bills? 8. Is your total debt on credit cards decreasing? 9. Are you always paying more than the minimum on your credit cards? 10. Are you paying bills on time most of the time? 11. Do you have a formal plan for your retirement funds? 12. Do you save regularly for your retirement? Section A Total

Section B 14. Do you take out new loans before the old ones are paid off or to pay off other debts? 15. Have you ever borrowed money from one creditor to pay another creditor? 16. Are you using credit to pay for items that you used to pay for with cash? 17. Are you near or at the limit of your lines of credit? (Including credit cards) 18. Do you ever pay bills late because you do not have the money available?

Total the number of Yes and No in Section A12 Yes Excellent financial health9-11 Yes Good financial health but better planning and spending control will allow you to start saving and plan for the future.5-8 Yes Shaky. You need to cut back on credit card use, watch for over spending. Plan your finances. Make a budget.0-4 Yes You are in trouble. See below for information on how to contact Consumer Credit Counseling Services.

If you answered “yes” to any of the questions in section B• You are headed into a credit trap. • You might want to schedule an appointment with someone that can help. Look in your local phone book under Credit & Debt Counseling.


WORKBOOK

FINANCIAL EXERCISES


Goals

EstimatedCost

TargetDate

Monthly Cost or Savings

Pay off the care oan in 18 months $3,600 18 months

$200(divide $3,600 by 18)

Establish an emergency fund of $1,000 in a saving account within 12 months.

$1,000 12 months

$83(divide $1,000 by 12)

Pay off credit card in 8 months $300 8 months

$45 (divide $300 by 8 + interest)

Buy a computer in the next year $900 12 months

$75 (divide $1,000 by 12)

Financial Exercise A (from page 12 of your Textbook)Goals should be Measurable and AchievableWhen you work on your goals you might need to gather information about your current loans and balances. Don’t try to do too much at the same time. It is better to have a few goals and actually achieve them than to have many goals and miss them all. Now it is your turn to fill in your goals in the space provided in the next chart. We have allowed you only three lines. It is important not to overdo goal setting. Don’t set yourself too many goals. The risk is that you will spread yourself too thin and then not being able to accomplish any of your goals.

Your Goals

EstimatedCost

TargetDate

Monthly Cost or Savings


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise B (from page 13 of your Textbook)Making a Monthly BudgetAfter setting your goals, your next step is to make a monthly income and expense budget, which will help you establish a method of meeting your goals. After that we will balance the budget and that’s the real moment of truth! Now that you have built your goals, the next step is to figure out how you can meet those goals. You need to make a budget. A budget is the actual plan for how you are going to spend your money and can be for any length of time. Making a monthly budget is most practical because many of your expenses such as rent and electricity are paid on a monthly basis. If you are paid weekly you might want to create a weekly budget. There are four steps involved in making a budget:

Determine your take-home-pay1.

Determine what expenses you have2.

Determine how much you spend on each expense3.

Balance your budget4.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise C (from page 14 of your Textbook)Monthly ExpensesExpenses listed are grouped by where they come from. Some expenses show up every month, some just once in a while and some you have all the time. It is useful, when you are budgeting, to separate expenses into the three following categories: Fixed, Periodic and Variable. Check your expenses on the following chart.

Fixed Expenses:• These bills and expenses are easy to plan and do not change from month to month.

Periodic Expenses:• Bills that show up from time to time. . . some you know about and some you don’t.

Variable Expenses:• These expenses and bills vary from month to month. You make the decision every time if you are going to spend the money or not.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise D (from page 15 of your Textbook)Fixed ExpensesBills like rent, mortgage payments, car payments and your cable do not change from month to month. These expenses are easy to plan and predict for the future. This includes your loan payments. Fill in your expenses in the space provided.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise E (from page 15 of your Textbook)Periodic ExpensesPeriodic expenses show up infrequently and sometimes with different amounts. Some of these expenses are easier to predict than others such as insurance premiums that you pay every quarter or every six months, and can be predicted with great accuracy the same way that we predicted the fixed expenses.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise F (from page 17 of your Textbook)Variable ExpensesThe last category of expenses is the variable expenses. The good news and the bad news regarding this category is that you have so many variable expenses during a month that it is very hard to track where you actually spent the money. The good news is that this also opens up a tremendous opportunity to save money by just keeping better control of the variable expenses that otherwise seem to slip though your fingers. Using all the information that you have available in form of cancelled checks, credit card statements, old receipts and educated guessing, fill in the amounts of your variable expenses in the following chart.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise G (from page 17 of your Textbook)Balancing Your BudgetThe final step in your financial overhaul process is to balance your budget. You will learn if what you have planned in your budget will work, or if you have too many expenses for your income. Ideally you want to put yourself in a position where you have much more income than expenses. Just because you have made a plan does not mean that you can afford the spending you have outlined.

Transfer the totals from the charts you previously completed into the following chart. After you have filled in these numbers, total the column. Note that you subtract the expenses from the top number (the income).


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise H (from pages 19 and 20 of your Textbook)Wants and NeedsNeeds: Think of these, as the basic bills you need to pay each and every month — like your mortgage and your car payment.

Wants You may be one of those people whose basic costs are under control, but you still find it tough to put money away at the end of the month.

Respond with True or False to the following statements:

home, I worry

If you marked True more than once, you

are probably heavy on the Must-Haves.

If you marked True more than once, you are probably over-spending on your

Wants.


WORKBOOK

FINANCIAL EXERCISES


Financial Exercise H (from pages 19 and 20 of your Textbook)SavingSaving is the road to financial health. Is your savings plan a “next month we’ll do it” because this month never works out? Respond with True or False to the following statements:

If you marked True more than once, you are strug-

gling to save enough money. If you aren’t saving enough then you are spend-

ing too much money on your

Wants or Needs or both.

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