THE CHECKBOOK CFE 3221V

THE CHECKBOOK CFE 3221V OPEN CAPTIONED HANDEL FILM CORPORATION 1994 Grade Levels: 9-13+ 18 minutes 2 Instructional Graphics Enclosed

DESCRIPTION John opens a checking account and is soon overdrawn. He realizes he needs more information about finances. Presents the basics about a checking account and checkbook. Reviews different types of accounts, PIN numbers, and using ATMs. Shows a check, how to write one, and reconciling the bank statement. Discusses deposits and withdrawals, endorsements, kinds of checks, and other sound, practical information. MONEY SERIES. INSTRUCTIONAL GOALS To demonstrate how to write a check. To depict reconciling a bank statement. To dramatize the consequences of writing checks with insufficient funds. To emphasize the importance of learning about money, banks, and checks. BEFORE SHOWING 1. Read the CAPTION SCRIPT to determine unfamiliar vocabulary and language concepts. 2. Individually write one reason for learning about money, banks, and checking. Without comment, read each reason aloud. 3. Using the K-W-L format, make a three-column classroom chart: a. For the K (What I Already Know) column, each viewer writes one statement about money, banks, and checking. Do not evaluate statements at this time. b. For the W (What I Want to Learn) column, each viewer writes one question about money, banks, and checking. 1

AFTER SHOWING Discussion Items and Questions 1. Complete the K-W-L chart begun in BEFORE SHOWING. a. In the L (What I Learned) column, answer the questions from the W column. b. Review the K column. Correct any incorrect sentences. 2. Discuss reasons for learning about money, banks, and checking. a. Hypothesize possible consequences for lack of knowledge of money, banks, and checking. b. Decide what responsibilities accompany having a bank account. c. Compare intentionally and unintentionally writing checks with insufficient funds. d. Evaluate carrying cash versus having a bank account. Consider the following: security, convenience, and earning interest. 3. Identify and label the parts of a check. 4. Discuss the parts of a check register. a. Locate the columns for: the date, check number, memo, checks or debits, payments or credits, reconciling check mark, and balance. b. Discuss reasons and uses for different colored rows. 5. Discuss what to do in case of loss of a checkbook. a. Why should one contact the bank immediately if one s checkbook is lost or stolen? b. How does contacting one s bank ensure protection? 6. Discuss traveler s checks. a. Compare traveler s checks with regular checks. b. Role-play purchasing and using a traveler s check. 2

7. Evaluate ways of withdrawing and depositing money into bank accounts. (See INSTRUCTIONAL GRAPHICS.) Applications and Activities 1. Write or role-play the telephone dialogue between John Davis and the sporting goods store manager. 2. Role-play an interview with John Davis regarding his experience writing a check with insufficient funds. 3. Survey local banks. a. Identify types of accounts available. Inquire about checking, savings, interest-bearing, personal, and joint accounts. b. List services available and service charges. Include the fee for writing a check with insufficient funds. c. Summarize requirements and procedures for opening accounts. d. Inquire if the bank is a member of the FDIC. e. Ask if the bank returns cancelled checks. If not, ask where are cancelled checks are held. 4. Compare prices for buying checks at local banks and check-printing houses. Justify a personal check choice. 5. Survey the school community to determine the types of banking services commonly used. a. Record how many have PINs, checking accounts, savings accounts, and joint accounts. b. Graph how often traveler s checks, cashier s checks, money orders, personal checks, and ATM cards are used. 6. Create a personal information sheet. Include: address, phone number, driver s license number, Social Security number, birthplace, date of birth, and mother s maiden name. 7. Open a mock checking account. a. Fill out an application form. b. Role-play meeting with a bank employee to open the account. 3

c. Create check facsimiles. Include: date, payable to, dollar amount, signature, bank code, branch number, account number, check number, and memo line. 8. Volunteer to regularly assist someone who has a checking account or use a pretend checking account. a. Write checks for bills. b. Record checks, other debits, and credits in the check register. c. Reconcile the account. (See INSTRUCTIONAL GRAPHICS.) d. Use past payments to figure a budget. Calculate future income and expenditures. Plan to spend less than earnings. INSTRUCTIONAL GRAPHICS Two instructional graphics are included with this lesson guide. They may be enlarged and used to create transparencies or copies. DEPOSITING AND WITHDRAWING IN A BANK ACCOUNT RECONCILING A CHECKING ACCOUNT WEBSITES Explore the Internet to discover sites related to this topic. Check the CFV website for related information (http://www.cfv.org). 4

CAPTION SCRIPT Following are the captions as they appear on the video. Teachers are encouraged to read the script prior to viewing the video for pertinent vocabulary, to discover language patterns within the captions, or to determine content for introduction or review. Enlarged copies may be given to students as a language exercise. [synthesizer playing] [synthesized strings] [military drum playing] da-da-dum, da-da-dum [gong bonging] bong bong bong bong brrrmmm (male narrator) This is John Davis, a high school senior. He intends to earn money to buy a car. He's gotten some gardening jobs and the pay is good. John went to the bank to open his first checking account, but he never took time to familiarize himself with the responsibilities. It didn't take him long to make a serious mistake. He wrote a check but there wasn't enough money in his account to cover it. Now he is in trouble. He receives a none-too-friendly call from the store manager requesting immediate cash payment! The last thing John wanted was to write a bad check, but he was negligent. He thought he had enough money in his account, but forgot to enter one check in the check register. He didn't know enough about checking accounts. His check was returned to Sports Unlimited by the bank saying "insufficient funds." The store was charged $7.50. 5 John will have to make good

for this. John received notice imposing a service charge of ten dollars for issuing this bad check. John's negligence cost him dearly. On the way to settle his debt, John decides to learn more about money, banks, and checks. Money has a number of functions. The value of goods or services is expressed in terms of money. This TV set costs $299.99. Money can be saved to buy things you want. But its most frequent use is as a medium of exchange. We pay for goods and services with money-- One of the simplest ways is with cash, bills, and coins. But it is not a good idea to carry around a lot of cash. It can be stolen! 6 Every self-respecting burglar knows of this popular hiding place for money. A fire can destroy some or all of your savings. Surely you don't have money to burn. [fire engine siren wailing] whooo whooo errnt Fortunately, there are places where you can store your money safely and have immediate access-- savings institutions, such as banks. Put your money only into banks which are members of the Federal Deposit Insurance Corporation, a government agency that guarantees one account for up to $100,000. There are many types of accounts. The most common are checking and savings accounts. Savings accounts pay interest on deposited money at scheduled intervals-- usually monthly. Checking accounts make it possible to make payments with checks instead of cash.

Checks are more widely used than any other form of money. Three-quarters of the nation's money is in checking accounts. There are both interest-bearing and non-interest-bearing checking accounts and many other variations from bank to bank. When you open an account, you fill out an application and put down important facts. Your address, phone number, driver's license number, Social Security number, birthplace and date of birth. Your mother's maiden name-- which few people would know-- or a password is requested for identification purposes. Then, obviously, there is your signature-- both on the application and the bank signature card. 7 Sometimes you are asked to select a "PIN"-- "personal identification number." This is another confidential means of identification. This terminal transfers your PIN number to the computer and identifies you. Try to learn your PIN number by heart. Don't write it on an obvious place. There are several types of accounts. Some are for one person. Others are joint accounts-- two or more people have the same account. To make an account active. you have to deposit some money-- cash or checks. In the case of some checks, the bank has to wait until they clear-- until the bank receives the funds. This holding period is indicated on the receipt so you'll know

when your funds are available. You don't have to go to the bank to make deposits. They can be made by mail. Transactions can be executed by electronic transmission. You can arrange for direct deposits, especially monies which come in regularly-- such as paychecks or Social Security checks. An increasing number of bank services can be made from home by computer-- an important feature for mobility-impaired persons. The bank supplies a "check package," usually for a fee. It contains your checks, deposit slips, and a check register. Keep your checkbook safe. In case you lose it or if it is stolen, contact your bank immediately. This is for your protection. Checks are numbered consecutively for your convenience. 8 Don't break the order. Checks have certain things in common-- this figure identifies the bank. A check is not complete unless it's dated. Here, you write the name of the person or business who will receive the check. The dollar amount paid has to be written here-- both in letters and numbers. Draw a line across the open space. Never write the amount like this. Someone could increase it to this! And never use a pencil. Most checks provide a space to indicate the purpose of the payment. The check must be signed to make it valid. The signature must match the signature card. If two signatures are required, both must appear. These unique figures at the bottom are data for the computer

called "magnetic information character recognition." They contain the code of the bank, the branch number, your account and check number. Checks are available in various designs. Select them according to your taste. Designer checks usually cost a little more than ordinary ones. Checks can also be ordered from check-printing houses less expensively. Your check package comes with "deposit slips." They show your name and account number which will be picked up by computer. The check package contains a "check register." Enter all deposits and withdrawals as well as bank charges. Keeping accurate records is imperative. This keeps you out of trouble. It was a simple, unintentional mistake on John's part that caused his problem. He didn't enter a check into the register. The balance looked higher than it was-- it seemed high enough but it wasn't. The intentional writing of checks against insufficient funds is fraud. It can have serious consequences. Depending on the amount and where it was written, it could result in a jail sentence. Payments by check and other charges are referred to as debits. Deposits are called credits. The next column indicates the "balance." Aside from checks made out by you, minor charges appear-- the cost of the checkbook, possibly a charge for every check you write, and other service items. Deduct these charges from your balance. 9

Withdrawals and deposits of money are done by the customer at the bank. Checks are not the only way to withdraw money. Automatic teller machines-- ATMs, make it possible to obtain cash 24 hours a day, 7 days a week. Be careful of thieves who might be after your money. Funds can be withdrawn by cashier's checks which have to be signed by a bank officer. These checks are made payable to a person or company. For small amounts, personal money orders issued by the bank can be used. When you take a trip, travelers checks allow you to safely carry large amounts of money. These checks are issued in denominations of $10, $20, $50 and $100. Banks make them available 10 for a small fee-- sometimes free. Travelers checks must be signed first by you at the time of purchase. When you arrive and are ready to cash the checks, you have to sign them again. The recipient makes sure the signatures match. Travelers checks are safer than cash. If lost or stolen, and not countersigned, the money will be refunded. Checks you receive for deposit into your checking account need your endorsement-- meaning your signature. It has to be the exact name as on the check. Put your account number on it. Endorsement will be proof of payment to the issuer. Every month or so the bank sends a statement and your used or canceled checks. The statement lists the deposits made

and the checks cleared during the report period. Your check register balance and statement balance are not always the same. The reason is, days go by between the statement date and the time you examine it. Checks sent out may not have reached your bank and deposits after the statement date would not appear, either. Furthermore, there may be service charges to deduct and in some accounts, interest to add to your check register balance. This process is called reconciliation. Look over the checks cleared and returned with your statement. Mark them on the register. Checks that haven't cleared won't appear on the statement. Then, mark off the deposits made, as well. This work sheet on the back of the statement is needed to reconcile the balance. 11 First, enter the checkbook balance at the left. If there's a service charge-- in this case, $2.00--subtract it. Add interest, if any. None for this account. The "adjusted checkbook balance" is $978. Then go to the right side. List amounts of all checks that were made out and not listed on the statement. This total is $38.50. Post the ending balance from the front of your statement. Add any deposits made after the date of this statement. Add the ending balance and deposits to get a subtotal. Enter the outstanding checks of $38.50. Now subtract that amount to obtain the account balance.

These two balances should agree. As most of us know, this doesn't always happen. If there is a difference between the two balances, do the following: verify your additions and subtractions in your check register and the statement work sheet. Make sure checks and deposits are written in the correct column. Look over the statement from the previous month. Checks outstanding from a prior period may not have cleared. You may be in for surprises! This person forgot to enter a deposit in the check register and has more money than expected. But it can work the other way too. John forgot to enter a check and there was not enough money for the next one. We mentioned that endorsed checks 12 are proof that a transaction had taken place. It is essential to keep checks-- especially those for tax payments, insurance premiums, and others. Past payments can help to figure a budget. A budget is a calculation of future income and expenditures. If possible, spend less than you earn and put the surplus into an interest-bearing savings account. It will provide a cushion for emergencies of all sorts. Saving money can become a habit. You are getting interest on the interest you earn. This is called compound interest. And what about John? He found out about banks, checking and savings accounts. Soon, he'll have enough money to buy his first car. He learned that savings

can be a passport to a happy future... and of the importance of the letter "N." It is better to own money than to owe it. [synthesizer playing] Funding for purchase and captioning of this video was provided by the U.S. Department of Education: PH: 1-800-572-5580 (V). 13

CFE 3221V THE CHECKBOOK RECONCILINGACHECKINGACCOUNT Start: Lookoverchecks cleared(andreturned) withyour statement. ] Markthecleared checksonthe register. Verifyadditionsand subtractionsinthe checkregister. ] Markoff depositson theregister. Verify additions and subtractionsinthe worksheet ontheback of thestatement. Completethe worksheet ontheback of thestatement. Makesurechecksand depositsarewrittenin thecorrect columnsin theregister. Doesthe statement balance matchtheregister balance? NO END

CFE 3221V THECHECKBOOK DEPOSITING AND WITHDRAWING IN ACHECKING ACCOUNT ATM DIRECTIONS: CHECK HERE IF IT APPLIES. Debit Credit WRITE YES OR NO. WRITE AT LEAST ONE IDEA FOR EACH COLUMN. Requires signature or endorsement I have used Pros Cons Cashier's check Computer bank services Direct deposit Electronic transmission Mail Money order Personal check Telephone/TTY Traveler's check