As members of Gen Z graduate college and prepare to enter the workforce, many members of this demographic lack basic money management skills. Only 26% have ever written a check, while 22% have balanced a checkbook, according to a new survey from Chime by Talker Research.
While these skills may seem antiquated in today’s digital world, they represent a solid foundation of financial knowledge and can pave the way to better money management skills across the board.
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Reasons To Write a Check
Even if you only need to write a check once or twice a year — or even less frequently — it’s often for milestone events like paying wedding vendors or buying a house.
“Digital payments often come with extra fees,” said Chime chief spending officer Janelle Sallenave, noting that these fees can add up for large payments.
Rather than walking into a car dealership, for instance, with $5,000 in cash for a down payment on a vehicle, a check provides a secure, fee-free way to pay. You might also want or need to write checks to cover rent payments, bank deposits for opening a checking or savings account online or even to mail money as a gift to an out-of-town relative.
For some purchases, such as buying a home, you’ll need to write a certified check or cashier’s check. These checks, usually for large amounts, come with a guarantee from the bank that the money is in the account and the check won’t bounce; it won’t be declined due to insufficient funds. A certified check is backed by the money in your account, while a cashier’s check is drawn from the bank’s funds after you give the bank that money plus a fee.
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Balancing a Checkbook: The How and Why
Knowing how to balance a checkbook is even more important, as it can help you keep tabs on your money, avoid overdraft charges or returned payments and can also help maintain a budget. Especially with automatic electronic deposits and automatic bill-pay features in checking accounts today, it’s important to take a look at what’s coming into and out of your account weekly, if not daily.
“Your online balance doesn’t always reflect pending charges or holds,” Sallenave said.
Getting into the habit of keeping a separate record of transactions and comparing that record to your bank statements monthly can also help you spot erroneous charges or even subscriptions you might want to cancel because you don’t use them anymore. Essentially, taking a solid look at your money coming in and out regularly can help you feel more in control of your finances.
Budgeting: A Positive Indication of Financial Maturity for Gen Z
While Gen Z may not be the best at analog money management tools like checks or paper bank ledgers, they are showing financial maturity in other ways. The Chime survey indicated that 35% of Gen Z has created and stuck to a budget.
They might be leveraging digital tools for money management, and keeping a budget indicates “they’re paying attention to where their money goes,” Sallenave said. She called a budget “a step in the right direction when it comes to [being] financially responsible.”
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This article originally appeared on GOBankingRates.com: Only One-Quarter of Gen Z Has Ever Written a Check — Does It Matter?
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