Money is better than poverty, if only for financial reasons.
~ Woody Allen
When folks talk about voiding a check they usually mean one of two things. The first is voiding a blank check in order to give it to someone so that you can either get paid or allow automatic withdrawals from your bank account.
For example, an employer will often want you to provide a void check as it is most common nowadays that you get paid electronically by direct deposit. Giving them a voided check provides all the banking information that they need in order to pay you correctly and not give your salary to some other lucky devil.
You might have also provided a voided check (cheque in the UK) to someone with whom you want to give money to on a monthly basis.
As an example, the savings that I save each month into a retirement account are provided in such a way. My mutual fund provider received a blank voided check from me along with a form which entitled them to deduct a certain amount of money from my checking account each month to contribute towards my savings. It makes things very easy instead of having to send them a check each month for the money I want to put into any savings vehicles with them.
Sometimes we might also think of voiding a check when we have already written one but we don’t want to have it cashed. Perhaps the person you gave the check to lost it or misplaced it and so you want to void that check as you have now paid them by cash or credit card.
So how do you void a check in these circumstances. The first example is quite simple. You don’t write anything on the check at all except for the word VOID (in all caps ideally) diagonally across the face of the check. I also bracket the word VOID with a line over the word and I underline it too. Make it big so that it really stands out. This is the proper and safe way to void a check.
Additionally if you want to take extra precautions you can also write VOID in capital letters where you would put the numerical dollar amount. You can also write VOID in all caps across the signature line and lastly you can write VOID in all caps diagonally across the back of the check as you did on the front.
Simple enough right? But how do you void a check that is already in somebody else’s hands and you don’t want them to be able to cash it. That’s also easy but sometimes not guaranteed by your bank.
For example if you don’t provide accurate details about the check when you are asking the bank to cancel the check, they will likely not guarantee the check will be cancelled. So make sure every detail they ask you is correct. Also, what you are really doing here when trying to void a check like this is requesting a stop payment or to cancel a check. That is how you should identify to the bank what it is you are trying to do. Tell them “I want to cancel a check”, or “I want to stop a check payment”.
So what do you need to provide them? Generally, a bank will want the following information. Your account number, the branch number you usually bank at. They will also want to know exactly who the payee is. So for example if you wrote on the check that the payee was “John P Smith” you need to tell the bank that the payee was John P Smith and not John Smith.
Your bank will also want to know exactly how much the check was for and when it was made out. So if you were paying John P Smith $56.89 you would give the bank the exact amount and not tell them that the check was for $56.
Something else you also want to consider when cancelling a check is the fee involved. With most banks this is substantial. My bank which has one of the lowest fees across the board in town charges me $10 for a check cancelling. Your bank might charge more.
Naturally, I won’t cancel a check for $10 or less, but even a $25 or $50 check will give me pause to really consider whether I want to be charged that $10 service fee.
This is why it is very important to keep great and accurate financial records. Not only will it save you money – some banks will charge more if you can’t provide the full details requested – but when you keep good records you are less likely to get into financial trouble. As me grandmother used to say, if you take care of the pennies the pounds will take care of themselves.
For many years now, over a decade, I have been without overdraft protection. This has saved me additional money not because there is usually a fee for having overdraft protection but because most folks use it at least occasionally and when you use you pay.
Additionally having no overdraft protection is one of the ways to maintain discipline over your money and financial situation.
Once a week or even more often if I am out and about and spending more money than I usually do I check in with my bank accounts. I use an Excel spreadsheet for my budget and every dollar I spend gets jotted down in there. I don’t find this onerous. In fact it takes me less than 5 minutes a day or a half hour a week if that. The benefits however are astonishing.
This type of approach has helped me pay down my debt quicker and increase my savings exponentially. And I wasn’t even necessarily on a budget as most of you might think of it. I just kept track of every dollar.
When you do this a strange thing happens. After only a month or two you start to see how frivolously you spend your money on some things. And then as you’re standing in line and about to reach for that next gadget or doohickey you think twice and you don’t get it.
And over time you will find that your expenses natural trend down and you are saving more money without even trying. This is the power of using your money carefully by learning the power of discipline and living lightly but abundantly.