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Writing a check sounds like a straightforward process: simply fill in the date, amount, payee name, and your signature. However, there are correct and incorrect ways to complete these steps. Even in the era of digital banking, knowing how to write a check properly is still an important skill. Making even a small error can lead to issues such as processing delays, potential fees, and even fraud.

Whether it’s been a while since you’ve written a check or you’ve never never written one before, the following step-by-step guide can help ensure you fill out a check completely and accurately.

Understanding the Parts of a Check

Before filling out a check, it helps to understand what each section is for. Personal checks typically include the following:

•   Date: The day you write the check

•   Pay to the order of: The name of the person or business receiving the payment.

•   Amount box: The payment amount written in numbers.

•   Amount line: The payment amount written in words.

•   Memo line: An optional note about the purpose of the payment.

•   Signature line: Where you sign the check to authorize the payment.

•   Routing and account numbers: The numbers printed along the button of the check that identify your bank and checking account.

You can fill out these sections in any order you prefer. The key is to make sure you don’t leave anything out. Below, we walk you through the process of completing these fields, filling out the check from the top of a check to the bottom.

1. Date the Check

First things first: Write today’s date on the space provided in the upper right-hand corner of the check. Putting the date on your check provides a record of when you wrote it.

You can also postdate a check writing a future date on it. However, simply postdating a check doesn’t necessarily prevent the recipient from depositing it early. If you postdate a check, you may want to notify your bank and ask about its policies for handling postdated checks.

It’s also worth noting that there are limits on how long a check is good for before it becomes “stale” and may no longer be accepted by a bank. For personal checks, this is typically around six months, though policies vary by bank.

2. Add the Recipient’s Name

On the line labelled “Pay to the order of,” write the name of the individual or business you are paying. Be sure to double-check the spelling of the person’s name or the official business name to avoid any payment problems.

You can also make a check out to “cash,” but this poses a security risk. If you or the payee loses the check, anyone who finds it may be able to cash or deposit it. You can also write a check to yourself if you need to transfer funds from your checking account to another personal account.

3. Write the Payment Amount in Numbers

Write the dollar and cents amount in the rectangular box located to the right of the payee line (eg., $156.99.) It’s important to write the amount clearly so it can be read and processed correctly.

While the amount written in this box is used for processing, the text you spell out on the line below is the official legal amount if the two ever disagree.

4. Write the Payment Amount in Words

To help prevent errors or fraud, write the check amount in words on the line provided.

How to Write a Check with Cents

To write a check with cents, express the dollar amount in words and the cents as a fraction. For example, $156.99 would read “One hundred and fifty-six and 99/100.”

How to Write a Check with No Cents

If the dollar amount is a whole number, such as $156.00, you can write “One hundred and fifty-six and 00/100.”

5. Sign the Check

One of the biggest mistakes check writers make is forgetting to sign the check. An unsigned check generally cannot be processed. Be sure and write your signature on the bottom right-hand line of the check. If you are on the receiving end of a check, it’s also useful to know how to endorse a check for mobile deposit correctly when you deposit funds.

6. Add a Memo

Adding a note in the memo line on a check is optional, but it can be useful. It can help you remember why you wrote the check, such as “July rent” or “Beyoncé tix reimbursement.”

Some payees, such as government agencies, may require identifying information to ensure your payment is credited to the correct account. If instructions call for a specific identifier, you can generally put it in the memo line. Check the payee’s instructions first, particularly before including sensitive information such as a Social Security number.

Example of Writing a Check

Here’s an example of what a properly filled out check looks like when completed:

Best Practices for Filling Out Checks

While filling out a check is straightforward, there are some additional tips that can help protect your account and ensure a successful transaction.

Use a Pen

To safeguard your checks, it’s wise to fill them out in ink, preferably blue or black ink for easier readability. You’ll want to avoid using a pencil because information in pencil can potentially be erased or altered.

Don’t Sign a Blank Check

It’s a good idea to wait until the check is fully filled out before signing your name. If a check has your signature but no payee name or dollar amount, someone else could fill in the blanks and attempt to cash or deposit it.

Keep Your Signature Consistent

Using a consistent signature can make it easier to identify an unauthorized signature if a check is altered or forged. It can also help your financial institution compare a signature with its records if questions arise about a check

Use Print Rather Than Cursive

Filling out everything on the check except your signature in clear print can make the information easier to read and help avoid processing errors. Be especially careful when writing the numerical amount and the payee name.

Proofread After You’re Done

Before mailing or giving someone the check, it’s a good idea to review it carefully. Make sure each section is filled out correctly, there are no spelling errors, the numerical amount matches the amount written in words, and you’ve signed the check. If you notice a mistake, you can void the check by writing “VOID” in large, bold letters across the front of the check.

How to Protect Your Accounts When Writing Paper Checks

After mailing or handing over a check, it’s a good idea to keep tabs on its status and your bank account. Here are some smart moves that can help keep your records straight.

Record the Payment

Checkbooks typically come with a check register — a place to record your check usage and current bank balance. It’s important to record:

•   The check number

•   The date you wrote the check

•   The payee information

•   The dollar amount

Doing this can help you balance your checkbook, better manage your money, and avoid writing checks for more than you have available in your checking account, which can result in bounced checks, return payment fees, or overdraft fees.

Monitor for Fraud or Lost Checks

It’s wise to keep an eye on your account for checks you don’t recognize or amounts that don’t match your records. If you lose a check or suspect someone has altered or fraudulently used one, contact your bank as soon as possible and ask about its options for stopping payment or reporting the transaction.

Regularly reviewing your account can also help you spot unauthorized activity sooner.

Check Your Available Balance

You don’t want to write a check for more money than you currently have available, so keep an eye on your bank balance to avoid a bounced check. Whether you have a traditional or online checking account, you should generally be able to monitor your balance through your financial institution’s website or app.

Remember that your available balance may not reflect every outstanding check. Recording checks in your check register can give you a more accurate picture of how much money you actually have available to spend.

Consider Automated Payments

While checks still can have their time and place in your financial life, online banking and mobile banking apps can make it easy to pay bills and send funds to other accounts. You may be able to automate recurring payments or transfers, which can reduce the need to write paper checks

For example, instead of writing a paper check each month, you could set up a recurring online payment or transfer for a bill. One-time electronic payments may also be an option when you need to send someone money. Depending on the payment method, these options can eliminate the need for envelopes and postage while making it easier to track payments digitally.

The Takeaway

Knowing how to write a check can still come in handy for paying rent, sending money to someone, making certain purchases, or handling payments that don’t offer electronic options. The process is simple: date the check, name the payee, write the amount in numbers and words, sign it, and add a memo if needed. Taking a few extra precautions — such as using a pen, avoiding blank signed checks, recording payments, and monitoring your account — can help you write checks safely and keep your finances organized.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do I write a check for 1000 dollars?

Write “$1,000.00” in the amount box. On the line below, write “One thousand and 00/100.” Then fill in the date, payee, and your signature. You can also add a memo to note the purpose of the payment. Before giving or mailing the check, double-check that the numerical and written amounts match and that you have enough money available in your checking account to cover it.

Do I need to endorse the back of a check I write?

No. The person writing the check does not endorse it. The recipient, or payee, typically endorses the back of the check when depositing or cashing it. Your signature belongs on the signature line on the front of the check.

What happens if I make a mistake filling out a check?

If you make a mistake while filling out a check, don’t try to erase or alter the information. Depending on the error and your bank’s policies, the safest option may be to void the check and write a new one. If you have already given the check to someone, contact the recipient and your bank to determine the appropriate next steps.

Can I write a check to myself?

Yes. You can write a check to yourself by putting your own name on the “Pay to the order of” line. For example, you might do this when transferring money from your checking account to another account. Be sure to record the check in your check register and make sure you have sufficient funds to cover it.

Is it safe to mail a filled-out check?

Mailing a check has some risk because it contains your bank account information and could potentially be lost, stolen, or intercepted. If you need to mail a check, it’s a good idea to use a secure envelope and avoid leaving it in an unsecured mailbox for an extended period. It’s also a good idea to monitor your bank account afterward to confirm that the check is processed for the correct amount and payee.

Photo credit: iStock/payphoto

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SOBNK-Q326-111

Dealing with people who ask for money can be uncomfortable, and it can put a strain on even the best of relationships. You may feel pressured to say yes when you can’t really afford to. Or you may get tired of handing over your hard-earned cash to someone you view as being financially irresponsible.

Having a strategy for answering when someone asks for money can make those situations feel less awkward and keep you from making a poor financial decision.

Determining if You Have the Funds to Help First

Any time someone asks for money, there’s an important question to ask before you consider saying yes: What can I afford?

Giving friends money when they’re in a jam could make you deplete your bank account if your budget is already strained. So before agreeing to hand over any cash, review your financial situation first to see how much money you can realistically part with.

This is especially important when someone asks for money, and it’s more than just a few bucks. Say your aging parents ask you for $10,000 to help with medical bills, for example. That’s not exactly pocket change. Talking to parents about money may not be easy, but if you can’t afford to part with that kind of money, it’s important to say so upfront.

Recommended: Guide to Practicing Financial Self-Care

Determining if It Is for a Genuine Need or Financial Situation

When someone asks for money, it’s natural to want to know what it’s for. And that might play a part in your decision to say yes or no.

For example, there’s a big difference between your younger sibling asking you for $1,000 to put a security deposit on an apartment and asking for $1,000 to buy a gaming console. One is a need, while the other is a want.

If you’re constantly dealing with family members or friends who ask for money to fund their desired lifestyle, you may begin to feel that you’re being taken advantage of. So it’s okay to set boundaries and specify that you’re only willing to give friends and family money in situations where there’s a genuine need.

However, be wary. Some people might use their hard-earned money on things like, say, the latest mobile device or a weekend away and then come knocking for cash when a student loan or medical bill is due. Again, you don’t want to fund someone’s extravagant lifestyle.

Understanding the Risk Involved With Lending Money

Borrowing from friends and family isn’t the same as getting a personal loan from a bank. If someone asks you for money, they probably aren’t expecting you to whip out a loan agreement or charge them fees and interest, for instance. And they might assume that if they don’t pay you back, you won’t bombard them with collection calls the way a traditional lender would.

When you lend money to friends and family, you’re taking on risk. If they don’t pay you back, then you likely won’t be able to get that money back unless you’re willing to sue them in small claims court. When debts between friends or family members go unpaid, that can lead to the eventual breakdown of the relationship.

If people who ask for money regularly seek you out, there are two ways you can try to manage the risk factor:

•   Require them to sign a loan agreement.

•   Consider the money a gift.

The former can give you some legal protection if they don’t pay, but some people might balk at having to sign it. The latter, meanwhile, eliminates all risk since you’re assuming you’re never going to get the money back anyway. But you have to be sure beforehand that you can afford the loss.

Also, be aware that it may change the nature of your relationship with the person to whom you are gifting the money. Consider whether you want to set a precedent of bailing out, say, your younger sister’s or your partner’s finances.

Recommended: 5 Ways to Achieve Financial Security

Paying for Things Directly Instead of Gifting Money

If you’re not comfortable giving cash to friends or relatives who ask for money, you could offer to pay for things for them instead. If your best friend asks for $300 to pay their electric bill, you might not feel 100% sure they’ll use the money for that. You could offer to pay the bill for them instead.

You might also consider offering nonfinancial help. For example, if you have a cousin who is a struggling single parent and often requests cash, you might offer to watch their kids for free so they can spend time looking for a higher-paying job or take night classes to advance their education. You’re still helping them out, but you’re not giving them permission to turn to you for money every time they need it.

Watching Out for Your Financial Goals

Saying yes when someone asks for money can be problematic if it means your financial goals suffer. Going back to the example of aging parents, helping them pay for medical bills or other expenses in retirement could mean that you’re shortchanging your own financial future.

Again, it all goes back to looking at how much you can afford to give and whether you’re comfortable giving money to friends and family, knowing that you might never see that moolah again.

If doing so would put your money goals at risk, it’s important to consider whether helping them out is truly worth it, especially if the money they’re asking for is to fund wants rather than needs.

Learning From Your Mistakes

If you’ve gotten into the habit of automatically saying yes when people ask for money, or if you’ve given someone money in the past and regretted it, it’s not too late to correct those mistakes.

For example, imagine you have that one friend who, when you dine out, always asks if you can pick up the tab when the check arrives. Maybe they say they haven’t gotten paid yet and that you’re lucky to earn a higher, dependable salary.

Remember, it’s perfectly okay to say, “I can’t afford to keep picking up the tab for dinner. What’s another way we can enjoy time together without spending as much?” You could suggest that rather than going out, you do potlucks at home instead. This could help you avoid feeling like you’re being taken advantage of.

If you feel like you’ve made a mistake with money by lending it or giving it to friends and family, don’t shy away from it. Analyze the situation to figure out what went wrong, then commit to not repeating those same mistakes again. Just because you gave a person money in the past doesn’t mean you must continue to do so.

Teaching Them Smart Financial Habits

If you find yourself dealing with someone who asks for money on a regular basis because they’re terrible at managing their finances, you could offer to help. For example, you might introduce them to some online resources for learning about money or share your favorite budgeting app or savings calculator with them.

Keep in mind that this doesn’t always work. If someone has learned poor financial habits from an early age and doesn’t seem inclined to change them, you may not be able to put them on a different path. In that case, you may need to kindly but firmly say no to their frequent requests for money and know that you tried to improve their situation via education.

Providing Financial Resources to Help Them

If someone asks for money and you either can’t afford to give it or would prefer not to, you can still point them in the right direction. You can help them explore other ways to borrow money, such as personal loans, lines of credit, or credit cards.

Just be mindful of steering them toward loans that might worsen their financial situation. Payday loans, for example, can feature astronomical interest rates that can quickly lead borrowers into a downward spiral of expensive debt. Cash advances on credit cards are another very expensive way to borrow money that one may want to avoid.

Valuing Yourself and Your Hard Work

You work hard for your money, so it doesn’t make sense to give it away without some thought beforehand. A request in and of itself isn’t a good reason to part with your cash. For all you know, the person asked half a dozen people who said no before they came to you, and they may have several people they are planning on asking for funds if you decline.

When people ask for cash, check in with your money mindset. Don’t undervalue the effort it took for you to make it, even if that’s not something that’s on their radar. Also, be clear about how it will be used.

For example, finding out after the fact that the $500 you thought was going to buy groceries for your sister and her kids actually went to funding a trip to an amusement park might make you feel resentful. You may feel like your hard work to make that $500 was all for nothing since it went to a frivolous expense.

Not Giving Out of Guilt

Guilt can play a big part in influencing financial decisions. For example, perhaps your spouse’s parents gave you the money to put down on a home after you were married. That can lead to sticky situations with how to handle money with in-laws for years to come if they later need financial help and automatically expect you to provide it.

You may feel too guilty about the down payment gift to say no, which could put a strain on your finances or even your marriage. Or it may be your parents who are putting a guilt trip on you to justify asking you to pay for their expenses in retirement. Talking about money with your partner can help you to avoid conflicts in these kinds of situations.

Guilt can also come into play in other ways. For instance, you might feel guilty about making more money than your friends and use that as an excuse to always pay for nights out or give them money. But allowing guilt to guide you can lead to everyone you know treating you like a personal bank. So it can be important to not let guilt cloud your decisions and feel comfortable saying, “No, sorry I can’t” to money requests without feeling obligated to explain your reasoning.

The Takeaway

Knowing how to navigate the conversation when people ask for money can make those situations less stressful. You don’t always need to say no, but it’s important to know when doing so makes sense for your financial situation and your personal relationships. Whether you do or don’t choose to loan money to friends and family, it’s important to keep working toward your own financial goals by saving regularly.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

When should you say no to someone who asks for money?

It may be a good idea to say no to someone who asks for money if you truly can’t afford to give it or if you believe the money will be wasted on wants vs. needs. You should also consider saying no if you suspect the money will be used for illegal purposes.

How can we trust if someone is telling the truth?

There’s no way to tell if someone is being truthful, short of giving them a lie detector test. When someone asks for money, you essentially have to trust your instincts. If you suspect they might not be truthful about why they need the money, then you can say no.

How can I avoid disputes if I choose to say no?

Telling someone who asks for money that your answer is no could lead to conflicts. If you’re worried about a dispute, you can explain your reasons for saying no or simply say, “I’m sorry. It’s just not a good time.” Don’t allow them to argue with you or try to wear you down to change your decision.

Photo credit: iStock/Sergey Nazarov

SOBNK-Q326-059

Being a mystery shopper (or secret shopper) can sound like a dream come true: A company pays you as an independent contractor to hit the stores and buy things. You earn money by posing as a patron at a place of business and help evaluate the quality of the products and services.

However, not all mystery shopping jobs are legit (there are plenty of scams out there), and even the real jobs generally don’t pay enough to allow you to leave your day job. Still, working as a secret shopper can be a fun way to earn some extra cash. Read on to learn more about this type of marketing work and how to become a mystery shopper.

What Is Mystery Shopping?

Mystery shopping means a company hires you to use its services covertly. For example, you might bring your car into a shop for an oil change, buy a new pair of jeans at the mall, or eat at a new restaurant. The crucial factor is that the company’s employees don’t know by whom you are employed or that you are evaluating them, so you’ll gain insight into what typical operations are like. The purpose is for the company to gather your feedback to improve its business.

What Happens During Mystery Shopping?

During mystery shopping, you’ll head to the assigned business location and act like an average customer. You might have the job of returning something or noting the tidiness of the workspace.

After you complete your task, you’ll likely submit a write-up or complete a survey describing your experience, including what went well or how the company could sharpen its services. Generally, once the company receives your feedback, it will pay you, with reimbursements typically taking 30-90 days to receive.

How Much Do Mystery Shoppers Make?

According to Indeed, mystery shoppers across America earn $26.47 per hour on average, with an average annual salary of $51,168. Typically, you receive compensation per task instead of per hour. However, mystery shopping can be time-consuming, which is why the hourly pay is relatively low. Additionally, some mystery shopping opportunities don’t offer compensation.

While some side jobs, such as renting out a portion of your home, help you build passive income streams, mystery shopping pays by the gig. Therefore, to make continuous money, you’ll have to repeatedly take on mystery shopping jobs.

Can Mystery Shopping Be a Full-Time Job?

Companies pay mystery shoppers for their help, usually in the form of a flat fee. They may also repay all or part of the expenses you incurred performing the work. In either case, mystery shopping isn’t typically profitable enough to be a full-time job, though it can be a fun, low-cost side hustle. Remember, the time that mystery shopping takes and the hidden expenses such as unreimbursed travel expenses can reduce the value of your reimbursements.

Additionally, as independent contractors, mystery shoppers don’t receive benefits such as health insurance and paid time off. Also, if you are self-employed, saving for retirement is on you.

As a result, you’ll need to subtract those costs from what you think you could earn as a full-time mystery shopper. With an average salary of $51,168 a year, it may be challenging to make ends meet.

Would Mystery Shopping Be Considered Variable or Fixed Income?

Fixed income is a set sum of money that you can expect on a regular basis. For example, when you earn a salary, you will usually get paid the same amount weekly or biweekly.

On the other hand, variable income fluctuates weekly or biweekly. Since the income earned from mystery shopping can vary by company and project, your mystery shopping income is usually variable.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Do Mystery Shoppers Pay Taxes?

The IRS requires you to file an income tax return if your net earnings from mystery shopping (or any side hustle) were $400 or more for the year. If you netted less than $400 from mystery shopping, the IRS stipulates that you still have to file an income tax return if you meet any other filing requirements listed in the Form 1040 and 1040-SR instructions. Remember to keep records of your expenses so you can maximize your deductions.

Becoming a Secret Shopper

If you strategically acquire legitimate mystery shopping jobs, you can make quick cash to pad your budget every month. Here are steps to becoming a secret shopper:

•   Search online for mystery shopping opportunities from businesses.

•   Vet the advertisement and company to ensure the opportunity isn’t a scam.

•   Apply to the mystery shopping job.

•   Submit a background check and sign any related disclosures or professional agreements, if necessary.

•   Wait for the company to grant you access, then check its website for jobs and select one you’d like to complete.

The Mystery Shopping Providers Association (MSPA) has an online opportunity board to help you find honest, authentic mystery shopping jobs. In addition, the organization offers two certifications that make you a more desirable mystery shopper for companies. You can earn the MSPA’s silver certificate online and participate in a day-long workshop for the gold certification.

Recommended: A Guide to Ethical Shopping

Benefits of Becoming a Mystery Shopper

By becoming a secret shopper, you’ll enjoy the following perks:

•   You earn money for shopping, trying a delicious meal, or spending the night at a hotel.

•   You can create your own schedule and practice a healthy work-life balance.

•   You may get to keep what you buy.

•   You can often work during evenings and weekends if that is your only available time.

•   You decide for whom you want to work, meaning you can be selective when choosing jobs.

•   You are your own boss to a large extent, setting your schedule.

•   You can supplement income from your day job with mystery shopping or even try going full time.

•   You’ll have variety and excitement from new experiences every day.

•   You can help companies you like improve their products and services.

Drawbacks of Becoming a Mystery Shopper

If you’re considering becoming a mystery shopper, it’s a good idea to be mindful of potential downsides:

•   You likely won’t have steady earnings like a typical job, meaning some weeks will be more lucrative than others. In addition, each job may pay differently.

•   Frequent travel can put extra miles on your car and possibly cause damage. Even if you’re reimbursed for miles, you may still lose more money through oil and tire changes.

•   You’ll probably have to sift through countless scams while looking for jobs. If you fall prey to one, you’ll likely lose money or waste time.

•   Payment could take up to 90 days to receive.

•   Starting out, you usually won’t be able to access some of the better assignments available only to seasoned shoppers.

Tips Before Becoming a Mystery Shopper

If you’re planning on becoming a secret shopper, consider this advice on staying organized and achieving success.

Keeping Receipts

You’ll likely submit receipts for many mystery shopping jobs. Therefore, you may spend time mailing, faxing, or scanning receipts. It’s recommended to make copies for your own records to ensure you retain proof of completed jobs.

Signing Up for Multiple Sites and Companies

To make substantial income, you’ll probably work with numerous companies. As a result, you’ll typically have to become well-versed in the methods and preferences of a plethora of businesses. It can be a good idea to organize your work into files for each company to keep you from getting mixed up.

Watching Your Income and Taxes

You’ll likely owe taxes on the income if you earn more than $400 as a mystery shopper. Therefore, it’s recommended to meticulously track your earnings to ensure your income level is accurate on your tax return.

Watching for Scams

Unfortunately, not all mystery shopping jobs are legitimate. Scammers devise websites and advertisements to look authentic. Here are some signs to watch out for:

•   A requirement that you must pay to access a job is typically a dead giveaway of a scam. Companies with legitimate mystery shopping opportunities won’t charge you or demand that you transfer money from your bank account. Additionally, since MSPA lists mystery shopping jobs at no charge, you should not have to pay to view opportunities.

•   A mystery shopping job that promises you’ll make thousands of dollars during your first month is also likely to be fraudulent. While it is possible to generate significant income by mystery shopping, it takes time and certifications to access better-paying work. Even then, you may have to work at least 40 hours per week to earn enough to live on.

•   Scammers who use the MSPA name to con you into their fraud are another warning sign. MSPA is an excellent resource, but scammers posing as the organization try to lure mystery shoppers. The MSPA posts jobs but does not directly employ mystery shoppers. It can be wise to avoid advertisements for jobs with the MSPA, as they tend to be fake.

Knowing What You Signed Up For

It’s easy to get carried away when perusing mystery shopping opportunities. So before you click away, it’s a good idea to read the details about the opportunity first. For example, although you might see a job at your favorite store, the location might be an hour away instead of the one that’s a five-minute drive from home. Therefore, it’s wise to study jobs carefully before committing to something you may not enjoy or receive enough compensation for it to be worthwhile.

The Takeaway

Mystery shopping can be a fun way to earn extra money. Just keep in mind that it may not be as profitable as some other side hustles out there, and finding legitimate opportunities can be challenging. Still, the added perks of trying new products and having new experiences can make mystery shopping an enjoyable hobby that also puts a little extra padding in your bank account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is mystery shopping too good to be true?

Mystery shopping is a viable side gig that can increase your income by completing jobs for businesses that are looking to improve. However, scammers try to lure in would-be mystery shoppers by promising huge paychecks for quick jobs, and any mystery shopping job that sounds too good to be true probably is. That said, a wide array of mystery shopping jobs pay modest rewards that can pad your wallet.

Do mystery shoppers get to keep what they buy?

Mystery shoppers sometimes get to keep what they buy. It depends on the company’s policies for the specific job. The business might allow you to keep purchases in some cases and ask for you to return them in others.

Do mystery shoppers get paid upfront?

Mystery shoppers generally do not get paid upfront. It usually takes 30-90 days to receive payment for a mystery shopping job.

Photo credit: iStock/PeopleImages

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Budgeting can take some work to get just right. One area that often trips people up is understanding exactly how much they spend each month. Figuring that out can take some trial and error as well as fine-tuning. And even if things are humming along well for a few months, you can suddenly get hit with a surprise bill or a colossal credit card statement that jeopardizes your finances.

To help avoid that scenario and make budgeting easier, it’s important to consider some of the items that are often omitted from the expenses list when people set up budgets. This can help ensure that your hard work managing your finances stays on track.

Read on to learn about commonly overlooked expenditures and how to work them into your budget. That way, you’ll know exactly where your money is going, which can help you avoid debt.

What Are Some Expenses That Are Commonly Budgeted For?

When thinking about a basic living expenses budget, some items are so major, recurring, and important that it would be hard to overlook them. These likely include:

•   Rent or mortgage payments

•   Homeowners association fees

•   Utilities

•   Wifi

•   Cell phone bill

•   Car and/or student loan payments

•   Groceries

•   Daycare or tuition

•   Gym memberships

•   Medical insurance and pet insurance premiums

•   Transportation

Why Is It Important to Budget for Forgotten Expenses?

It’s understandable that some expenses may slip your mind when creating a budget. The typical person probably has dozens of things they are paying for in a given month. But these sneaky forgotten expenses can wreak havoc on your budget and prevent you from reaching your financial goals.

That’s why it’s important to pay close attention to your spending so you can adjust your budget as needed. These are some of the reasons why it’s important to budget for forgotten expenses:

•   Creating a successful budget requires knowing what you spend each month.

•   If you forget to add an expense and run out of funds to pay for it, you may end up pulling funds out of your savings account and sacrificing future goals to cover it.

•   If you really overspend due to forgotten expenses, you may have to turn to high-interest credit card debt to make ends meet.

Recommended: How Much Should I Save a Month?

20 Commonly Forgotten Budget Items

If you recognize the importance of accounting for all of your expenses, then it’s time to move ahead. Take a look at some commonly forgotten budget items to make sure they don’t fall through the cracks.

1. Home Maintenance

While it’s hard to forget about your mortgage payments, the other expenses of homeownership are easy to forget about and add up fast. From hiring a gardener to regular carpet cleanings and random handyman repairs, it makes sense to leave room in a budget for home maintenance as those charges tend to frequently pop up.

2. Vehicle Maintenance

Budgeting for a car payment is probably top of mind, since you likely don’t want to risk getting hit with late payment fees or losing your car. The same generally holds true for car insurance. But those aren’t the only car expenses worth planning for. Drivers also need to make room in their budget for such car-related expenses as tune-ups and repairs. You’ll also want to remember to include gas, insurance, parking and toll road fees, since they also have a way of adding up.

3. Taxes

Income taxes may be withdrawn from your paychecks, but property taxes generally aren’t. Forgetting about these bills is a common budgeting mistake. Then, when the payment does come due, it’s a nasty surprise that can throw your budget out of whack.

4. Medical Expenses

It’s easy to forget about or overlook your medical expenses, including over-the-counter and prescription drugs, dental cleanings, regular checkups, or getting new glasses or contacts. These are all vital expenses worth planning for. Budgeting for medical expenses can help improve your financial health too by helping you avoid debt.

5. Donations/Giving

Perhaps you donate when you see a worthy cause on social media or sponsor a colleague who’s doing a charity walk. This kind of spending is easy to forget about, so make sure to put it into your budget so you don’t wind up short of funds when you want to help others.

Recommended: 15 Creative Ways to Save Money

6. Office/School Supplies

Items that keep your home office or study space up and running need a spot in your budget too. This means accounting for things such as toner, paper, stamps, shipping supplies, and software subscription fees.

7. Renewals for Licenses (Insurance, Drivers, Etc.)

Some expenses only pop up once a year, or every few years, such as driver’s license or insurance renewals, but it can be helpful to split up that expense into smaller chunks and save for it month by month.

8. Seasonal Maintenance

Some home-maintenance needs are ongoing, but others come around seasonally. Similar to license renewals, it can be helpful to save up for pricey seasonal maintenance needs, such as gutter cleaning and snow removal, all year round. That way, you won’t come up short when a bill hits.

9. Items for Pets

Pets bring a lot of love into a home, but also a lot of expenses. From vet fees and pet insurance to toys, food, and doggie daycare, these expenses can be significant and deserve a place in your budget.

10. Personal Items (Hair, Nails, Etc.)

A bottle of shampoo here, a manicure there, plus regular haircuts — the myriad expenses that help you look and feel your best can add up quickly. They may only cost a few bucks a pop (hello, body wash) or only happen once in a while (that fresh set of highlights), but it’s wise to be prepared for the cost.

11. Lump Sum Bills

Some memberships and insurance plans may only renew once or twice a year. Many of them are lump sum bills, meaning you are expected to pay them in full, right away. Which is why it can be helpful to save money each month to make sure you have the funds to cover lump sum bills.

Recommended: 18 Common Misconceptions About Money

12. Ridesharing

If you rely on ridesharing apps to get around (whether it’s once a month or several times a week), it’s important to budget for that expense. The convenience can make it feel like a free ride…but it isn’t!

13. Delivery App Fees

Another app-based expense to look out for is the delivery fees that get added when you order dinner or groceries from the comfort of your home. Also, if you tip the driver, make sure to include that as well. These fees definitely add to the price of what’s being dropped off.

14. Business Expenses (Conferences, Trips, Etc.)

You may incur expenses related to work that aren’t reimbursed by your employer. These include such purchases as buying professional clothing, renewing professional licenses, or pursuing continuing education to further your career.

15. Entertainment

From travel to movies and concerts to museum memberships, there’s no shortage of entertainment costs that need to make their way into your budget.

Recommended: Are You Bad With Money? Here’s How to Get Better

16. Subscriptions or Membership Fees

Speaking of entertainment, you may be paying for one or more streaming platforms, such as Netflix, HBO Max, and Hulu. And you may have other subscriptions, including meal kits, personal care supplies, gym memberships, or even a wine- or beer-of-the-month club. These kinds of one-click sign-ups may not make it onto your budget, but they should.

17. Gifts for Others

From swanky birthday dinners to holiday gifts and wedding presents, you may spend a chunk of change every year to make others happy. It can help to save for the costs of gifts all year round. You can do this by estimating how much you expect to spend in this category for the year and then break it down into a monthly expense by adding a “presents” line to your budget. That way, when these expenses do pop up, you’ll be prepared.

18. Coffee

There’s nothing wrong with enjoying a pricey latte on the go now and then, as long as it finds a spot in your budget. These kinds of little treats can be an important part of self-care, and budgeting for them properly can be an example of financial self-care.

19. Roadside Assistance Costs

One extra that some drivers may find very worthwhile is roadside assistance service. Keep it in the budget, and stay safe.

20. Laundromat/Dry Cleaners

Whether you drop off your clothing at a laundromat once a week and have them washed and folded for you, or you DIY but occasionally drop clothing off at the dry cleaner, these are all costs that need to be considered in your monthly budget.

Why Are These Expenses Commonly Forgotten?

As you can see, the list of commonly forgotten monthly expenses is long. One key reason is that it’s relatively simple to remember to add the really big, recurring expenses, such as rent or a car payment, into a monthly budget. But there are plenty of invisible expenses that you pay for with a simple click online (whether that means paying for a subscription service or a life insurance policy) that just don’t come to mind when setting up a budget.

There are also those very infrequent charges, say, an annual technician visit to clean your heating system, that you can overlook until they hit. It’s also easy to overlook small but relatively frequent purchases, such as laundry detergent or printer paper, that can add up over time.

Accounting for as many expenditures as possible will help you hone your budget and be as prepared as possible for the bills that come your way.

The Takeaway

Tracking every expense can feel like a chore, but it’s the best way to stay on top of your finances. By consistently accounting for invisible costs, such as annual maintenance, subscriptions, or small, frequent purchases, you can stop surprise bills from throwing you off track.

A successful budget isn’t just about managing the big payments. It’s about having a clear picture of all your spending. Staying proactive with your tracking helps you avoid unnecessary debt and keeps you moving steadily toward your financial goals.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are common monthly expenses?

Common monthly expenses include rent or mortgage payments, utilities, food, cell phone bills, and loan or credit card payments. Many people also purchase clothes, meals/beverages away from home, personal care products, medical insurance, and have transportation expenses, which may or may not include car payments and insurance.

What are some hidden expenses you may have?

Some commonly forgotten budget items can include medical expenses, pet care costs, charitable donations, home- and car-maintenance charges, and subscription services, whether that’s a gym membership or streaming channels. Planning for these costs in advance can help you avoid unexpected bills and keep your budget on track.

Will my budget be messed up if I do not add these forgotten expenses?

It’s possible to mess up a budget if you don’t include all of your expenses. You may wind up with bills to pay and not enough income to cover them. To resolve this, you might have to dip into your savings or start putting things on your credit card, neither of which is ideal. The good news is, each month offers a fresh start to make your budget work better.

Photo credit: iStock/staticnak1983

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In most cases, opening a checking or savings account is not reported to the major credit reporting bureaus and will not have an impact on your credit score. The same holds true for normal bank transactions and account balances.

That said, there may be some cases when a bank will perform what is known as a “hard pull” when you open an account, requesting access to your credit file. This can temporarily lower your credit score. Here, take a closer look at how your banking activity can impact your credit and the best way to keep your score as high as possible.

Consider Your Options Before Choosing a Bank to Avoid a Hard Pull Penalty

Banks and other lenders usually make a hard pull, or hard inquiry, when you apply for credit. This action will lower your credit score slightly (say, by perhaps five points) and temporarily. While the hard pull will stay on your credit report for two years, its impact on your credit should only last for a few months.

While your credit score is updated regularly, here’s why you should be concerned about too many of these in-depth credit checks. Several hard pulls on your credit report at the same time can make it look like you’re taking on too much credit and therefore might have a hard time paying your debts back.

When you open a bank account in person or online, the good news is that most banks will perform what is known as a soft pull. This sort of informal credit check when you apply to open checking at a bank has no impact on your credit score. (As mentioned above, in some rare cases, a bank will also make a hard pull when you open checking and/or savings. For example, some overdraft protection programs are considered a line of credit, so a bank may make a hard pull before approving you.)

If you’re worried about how a hard pull might affect your credit score, especially if you’re actively seeking credit, ask a bank whether they use them and under what circumstances. If they do plan on doing a hard inquiry, it may be worth considering banks that avoid this option.

How to Protect Your Credit Score

While opening a bank account likely won’t have an effect on your credit, there are certain other bank-related transactions that may lower your score, such as failing to pay your bank back when you use overdraft.

Your credit score is used by banks and other lenders to determine how risky it is to extend credit to you. The lower your score, the more risk you represent to them, and they’ll offset this risk by offering you higher interest rates. If you have bad credit, lenders may not extend credit at all. If you’re applying for a home, car, or personal loan, this can obviously have major ramifications!

So, when you’re establishing credit, it’s critical that you protect your credit score. The goal is to have access to cheaper credit when you need it. That means if you’re not sure whether a hard inquiry will be performed, ask before approving a credit check. You don’t want those hard pulls to pile up.

Also, you may receive many different kinds of credit card offers. Don’t assume more is better, as each one you apply for will likely trigger a hard pull. This can raise red flags regarding your creditworthiness in the future.

Here are some other moves that can help keep your credit score in good shape.

Avoid Overdrafts

When you dip into the overdraft zone, you’ve spent more than you have in your checking account. If you have overdraft protection, your bank will step in and cover the shortfall. They will usually charge overdraft protection fees, and you’ll have to repay the money using a credit card or money from a savings account.

Overdrafts themselves do not affect your credit score if you promptly pay back the overdraft fees and what you owe. However, failing to do so will have an adverse effect on your credit. If, for instance, you are unable to pay off your credit card or the overdraft is sent to collections, your score is likely to tumble.

Avoid overdrafts whenever possible by keeping a close eye on how much money you have in your checking account and never spending beyond that amount. If you’re someone who frequently overdraws, you may consider dropping overdraft protection. This means your debit card transaction will be declined when you try to make a purchase with money you don’t have. It may be momentarily embarrassing or inconvenient, but it will help protect your credit.

Pay Back Your Debts on Time

Punctuality counts. Your payment history plays a big role in determining your credit score. It may take into account credit cards, auto loans, student loans, home loans, and other forms of credit. It will show details on late or missed payments, including how much you owed, how delayed a payment was, and how often you’ve missed payments. Late and missed payments will detract from your score and can even stay on your credit report for up to seven years. So it’s important to pay on time.

Don’t Co-sign

Say a friend or family member is having trouble securing credit for themselves due to their bad score. They may ask you to co-sign a loan, using your good credit to help bolster theirs. Your heart may be in the right place, and you may want to help, but proceed with extreme caution.

When you co-sign, you are also taking on responsibility for paying off that debt. That means if the friend or family member fails to make a payment, you’re on the hook for it. What’s more, their missed payments may have a negative impact on your credit score. For this reason, when you are in “protect my credit score” mode, it’s probably prudent to avoid co-signing.

File for Unemployment

If you lose your job and a steady stream of income, you may find it more difficult to pay your bills on time or you may take on more debt. Each of these scenarios can hurt your credit score.

Filing for unemployment can help you replace some of that income stream and prevent you from falling behind. What’s more, there is no public record that keeps track of who is receiving unemployment, and receiving benefits does not affect your score.

Seek Credit Counseling

Sometimes, despite your best efforts, debt gets out of hand or a credit score can spiral downward. If you are feeling overwhelmed and not sure of how to improve the situation, get help. Credit counselors are professionals trained to help you with money issues, including setting up a debt management plan as well as preparing and sticking to a budget.

You can find a counselor through nonprofit services, such as the National Foundation for Credit Counseling. With this kind of organization, there is usually no fee for your first counseling session, though there may be fees for subsequent services, such as crafting a debt management plan. These costs should be modest at most.

Be a Prudent Spender

The world has a lot of temptation out there in the form of tricked-out cars and mobile phones, great restaurants and vacation destinations, new clothes and more. But running up credit card charges you can’t pay off on time or taking out a loan with steep terms can damage your credit and leave you deep in debt. Making a budget and spending within your means can help you avoid this kind of debt.

A budget could help you determine how much you can comfortably spend each month. To build a budget, you’ll need to establish budget categories. First tally your necessary expenses, including rent, mortgage payments, utility bills, groceries, and insurance and debt payments. Subtract this from your monthly income. The money you have left can be put toward discretionary expenses such as eating out and entertainment, as well as paying down debt and saving. Be especially wary of spending beyond that discretionary limit. That’s where debt loves to live.

Monitor Your Score

You may wonder if checking your own credit score can lower it. The answer is no, and in fact, you should check. You can ask for a free credit report from each of the major credit reporting bureaus — Experian®, Equifax®, and TransUnion® — once per year. Each bureau will display slightly different credit scores. Take a look at each report and make sure it’s correct. If you find any mistakes, let the bureau know immediately.

Do Cash Management Accounts Do Hard Credit Checks?

Cash management accounts are alternatives to traditional bank accounts that are offered by online banks or robo-advisors. As with traditional bank accounts, cash management accounts typically will not perform a hard credit pull when you open an account. It is therefore unlikely to lower your score.

The Takeaway

For the most part, opening a checking, savings, or cash management account will not hurt your credit score. Banks, credit unions, and other providers typically do what is known as a soft pull, not a hard pull, when considering your application. This process should not lower your credit rating nor linger on your report. That said, there may be some activity related to your accounts that can cause your score to drift downward, such as unpaid overdrafts. Do what you can to avoid these and protect your credit score.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are the five Cs of credit?

The five Cs of credit are character, capacity, capital, conditions, and collateral. Lenders use this framework to assess whether you are trustworthy, can maintain your end of a financial arrangement, and have sufficient funds to enter this arrangement. They also factor in the big picture, looking at whether economic forces are favorable to your entering the arrangement, and if you’re taking out a loan, whether you have something of value to offer as security.

What is a hard inquiry?

A hard inquiry, also known as a hard pull, occurs when you apply for credit and your lender has requested to look at your credit file. A hard pull will temporarily lower your credit score, typically by five points or less.

Does it hurt your credit to open a checking account?

Generally speaking, opening a checking account does not trigger a hard pull and does not hurt your credit score. Opening a cash management account should also not lower your score.

Is there a downside to opening a checking account?

When opening a checking account, it is important to be aware of any fees you may be required to pay or account minimums you’ll need to maintain. Additionally, standard checking accounts usually don’t offer interest, so your money could earn more if you put it in a savings account.

Does opening a savings account require a credit check?

While most banks, credit unions, and other financial institutions do not check your credit when you submit an application to open a savings account, they may pull your banking history. You might be screened through the reporting agency ChexSystems, which tracks your checking and savings account history. This usually doesn’t affect your credit score.

Does opening a savings account impact your credit score?

As with checking accounts, opening a savings account does not typically trigger a hard pull that would affect your credit score. Savings account activity isn’t generally reported to credit bureaus.

Is it bad to open a savings account?

It’s usually a good idea to open a savings account. It establishes a foothold for future savings, and you can open an account with just a little bit of cash — in some cases, you can even start an account without depositing anything.

Photo credit: iStock/svetikd

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