Managing your bank account

0:00- [Presenter] In this video, we're gonna talk about how it can be very valuable to automate your deposits and your withdrawals into a checking account and why that actually might be useful. So in the old days, what would typically happen is someone might cut a check that looks like this to you, and then you would have to go to your bank and then you would have to deposit.

0:23Or if you wanted to pay something to someone else, you would go to your checkbook and write a check that looks something like this, and then hand it to that person or mail it to that person and who knows what might happen in the mail. And then they have to deposit.

0:37And it can be slow, cumbersome. You might lose track of things. And so you can imagine it might be really useful to automate all of that. And in today's day and age, of course, you can get paper checks and then deposit them, or you can write paper checks and send them out to someone.

0:54But we can also do things a lot more efficiently. And the way that we do it efficiently is by having what's known as a routing number, routing number, and of course, your account number. So how does this work? Well, let's say you go to your employer. Let's say today your employer is actually sending you paper checks, and then every week or every two weeks, you're going out there and depositing it and you need to keep track of them.

1:22But most employers will allow for you to have direct deposit. This means that if you give your employer the routing number for your bank, so they know where your checking account is kept held, and your particular account number, then your pay will go directly into your bank account.

1:43You don't have to worry about let me check the mail at the right day, and then let me go to the and deposit it either on an online account or directly at the bank. So the next question is, where do you get this routing number and account number? Well, there's a couple of places.

1:57One, if you have access to a check, it's on your check. So this first number on a check is the routing number right over there. And the second number right over here is your account number. Some of you might be wondering, what is this number here? This is actually your check number.

2:17And so no one is usually going to ask for this type of thing. Now this isn't just about direct deposit. And then by the way, some employers might just ask you for a voided check. And what do I mean by voided check? You would take a check out of your checkbook that looks like this and then in big letters you would write void here so that no one can actually use that check.

2:39And then your employer, or whoever wants to do direct deposit, will then be able to use that information to do the direct deposit. But it isn't just about direct deposit. You can also automate payments. Let me write that down. Automate payments. So for example, for my utility payments, I've given the utility company my routing number and account number.

3:05And when the utility bills are due, it just automatically goes from my checking account to the bank, or to the utility company, I should say. Now, what's the value of that? Well, one, it's just one less thing for me to do every month and for me to keep track of and to have to put things into the mail.

3:23But it also helps avoid a late fee, or especially with something like utilities, avoid my utilities somehow being cut off because I forgot to write the check. It will happen automatically. Now when you do all of this, there is one thing to keep in mind. In fact, most of my things, I have direct deposit from my employer and I also automate payments out.

3:43But when you're doing that and everything's automated, you have to make sure that you don't lose track about what's going on in your bank account or especially in your checking account. Because if you keep automating payments and they're going out faster than they're coming in, at some point your account could go to zero or even go negative where you say your account only has $200 in it and you have just automated a payment for $300, then you've done something called overdraft.

4:09And most banks or many banks will have some type of penalty for overdraft. So you don't wanna have to pay more than what you're already paying. So you have to be very careful that when everything is automated, that you're still paying attention to what's happening in your bank account.

4:22You're checking it. I try to check my bank account at least once a week just to make sure everything is running smoothly, there aren't any weird transactions on it, so that I have a good handle on things.