Sunday, August 03, 2014

Checks and Balances: No, Seriously, Check Your Balances

This country, as you should be aware, has a system called Checks and Balances, which simply put states that each branch of government serves as a check on the others, so that one branch cannot become more powerful than the others, and everything remains in balance. Whether or not these checks are always applied and whether or not the balance is usually (or even "currently") maintained, is a matter of debate for the Social Studies departments (and, I guess, the Debate teams).

Today, I'm more concerned with a different type of checks and balances, specifically, your bank account. I just taught a year of Financial Algebra, a.k.a., "Math you actually will use for the rest of your life", and being able to manage and balance a checkbook is an early part of it. It's frightening when you see statistics about the number of people who can't (or don't) balance their checkbooks regularly, not to mention the ones who don't seem to have a problem with their inability. Maybe it's because of their ATM card usage or their online bill-paying when they don't have their check registers in front of them, noting everything down, but it's a poor habit to get into.

The leading explanation I can find is that everyone figures that the computers are doing everything know and the computers don't make mistakes. As a former computer programmer, I will attest to this: computers do NOT make mistakes. On the other hand, the humans interacting with them sometimes do. I know this because it just happened to me.

Don't Worry!: This is NOT a Rant. A minor inconvenience, but it looks like it will be resolved quickly.

One of the topics in the Checking Account chapter of Financial Algebra is balancing your checkbook and making corrective entries when it doesn't balance. What I found odd were the number of questions that contained a "bank error" that the student had to find. I guess that this was to make them aware that this could possibly happen, even though it rarely does. At the very least, it is less likely than the number of questions might indicate.

But mistakes can happen and I was lucky that I discovered mine as quickly as I did. My statement, containing an error, hasn't even arrived in the mail yet. What happened was this: I have direct deposit, and I went online to make sure that my paycheck had been posted and to double-check the exact amount as it varies (by a few cents). I noticed that the last two checks posted were for $20.00 and $25.00. Now, I rarely use checks any more as I pay most bills online. Generally, checks are for donations to charities and co-payments to doctors' offices that bill through the mail. Out of all of that, I couldn't remember anything that was $25.00.

Clicking on the entry brought up an image of the check. The title had the posted date and the posted amount of $25.00. The check clearly stated in words "Twenty dollars" along with the numeric amount $20.00. There was no way that it could be misinterpreted. (For what it's worth, I worked in a bank in college where I learned that even if the "0" looked liked a "5", it wouldn't matter because the amount written in words is what counts.)

I contacted the bank through email and they responded within twelve hours, which actually surprised me because it was the weekend. They are looking into it and correcting the situation. Way to go. Thank you. Accidents do happen, so I can't be too upset.

BUT ... imagine I was one of those people that rarely balanced my account. Suppose I just had a general idea of how much I had in there and I only took the bank's word for it whenever I checked at an ATM? I'd be out five dollars. Not much now, but if one mistake can happen, couldn't a bigger mistake happen?

And what about when I did get around to balancing my checkbook and found that I was off by $5.00 -- and let's hope that it was only that five dollars I was off by! -- how long would it have taken me to find the mistaken entry? How many times would I have double-checked the math in my register before noticing that one of the amounts were different. And then I'd have to find a copy of the check to find out just who was mistaken here. Did I write it out incorrectly? Did I record it incorrectly?

So not being capable -- or worse, not being willing -- to balance a checkbook is not something to laugh about. Innumeracy -- numerical illiteracy, basically -- isn't anything to be proud of.

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