Checking Accounts — slides
Financial Literacy Club
Money Fundamentals · Lesson 2
Checking Accounts
Your everyday money hub: how checking works, debit vs. credit, and the fees to avoid.
12-minute lesson · learnwithflc.org
Checking Accounts · 1 / 21
Financial Literacy Club
Money Fundamentals · Lesson 2
Checking Accounts
Your everyday money hub: how checking works, debit vs. credit, and the fees to avoid.
12-minute lesson · learnwithflc.org
Today's goals
By the end of class, you'll be able to…
- Describe how money moves into and out of a checking account
- Explain the difference between debit and credit
- Keep a running account register and spot when an overdraft would happen
Warm-up
Your checking account shows $120. A $60 phone bill is scheduled to come out tomorrow. How much can you safely spend today? Explain.
Think, then write your answer.
The big idea
Checking Accounts
Your everyday money hub: how checking works, debit vs. credit, and the fees to avoid.
Money Fundamentals · Lesson 2
A checking account is where your everyday money lives. Paychecks come in. Spending goes out — through a debit card, bill payments, transfers, and apps.
Money Fundamentals · Lesson 2
Checking accounts are built for access, not growth. They usually pay little or no interest. That's fine — their job is to be the hub your money flows through.
Vocabulary
Debit card
A card that spends money you already have in your checking account. A credit card, by contrast, borrows money you'll have to pay back.
Money Fundamentals · Lesson 2
Fees are the main thing to watch. Common ones include monthly maintenance fees (often waived if you meet a requirement), overdraft fees for spending more than you have, and fees for using another bank's ATM. Many banks and credit unions offer accounts with no monthly fee — shop around.
Money Fundamentals · Lesson 2
Your current balance isn't always what you can spend. Upcoming bills and pending purchases will take money out soon. Good money managers track what's about to leave, not just what's there now.
Money Fundamentals · Lesson 2
Is my money safe?
Deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution, for each account ownership category. If you're under 18, most banks require a parent or guardian on the account.
See it
A paycheck arrives by direct deposit into checking. From checking, money goes out to debit card purchases, bill payments, and transfers into savings.
Paycheck
Direct deposit
Checking account
Your money hub
Debit purchases
Food, gas, everyday spending
Bills
Phone, subscriptions
Savings
Automatic transfer
Real example
Jordan and the overdraft
Jordan has $40 in checking. A $35 phone bill is set to autopay tomorrow. Today, Jordan buys a $12 lunch with a debit card.
- After the bill, Jordan would have $40 − $35 − $12 = −$7.
- If Jordan never opted in to overdraft coverage for debit card purchases, the bank would usually decline the lunch purchase — embarrassing, but free.
- If Jordan did opt in, the purchase could go through with an overdraft fee — $30 or more at banks that still charge them. That $12 lunch could end up costing over $40.
The fix: check upcoming bills before spending, turn on low-balance alerts, and read your bank's fee schedule.
Try it together
Try it: track a month in checking
Check off each transaction as it happens and watch the running balance. Can you finish the month without going below $0?
Starting balance: $60
Optional purchases can be switched off.
| Transaction | Amount | Balance |
|---|---|---|
Paycheck (direct deposit)Mar 1 | +$210 | $270 |
Phone bill (autopay)Mar 2 | −$45 | $225 |
GroceriesMar 5 | −$38 | $187 |
| −$16 | $171 | |
GasMar 12 | −$40 | $131 |
Paycheck (direct deposit)Mar 15 | +$210 | $341 |
Automatic transfer to savingsMar 16 | −$75 | $266 |
| −$120 | $146 | |
Car insurance (autopay)Mar 24 | −$110 | $36 |
| −$60 | −$24Overdrawn |
The account goes negative on Mar 28 (Eating out with friends). Depending on your bank, that purchase could be declined or trigger an overdraft fee. Which optional purchase would you skip?
Activity · pairs · 10 min
Register Race
- Give pairs a starting balance of $180 and this list, in order: (1) groceries −$42 debit, (2) phone bill −$65 autopay, (3) ATM withdrawal −$20 plus a $3 out-of-network fee, (4) concert ticket −$89 debit, (5) paycheck +$210 direct deposit, (6) gas −$35 debit.
- Pairs record each line in a register with a running balance.
- Pairs circle the first transaction that would overdraw the account and write one habit that would have prevented it.
- Compare answers with another pair.
Check for understanding · 1 of 3
Your checking account shows $60. A $45 autopay bill is scheduled for tomorrow. You want to spend $30 on food today with your debit card.
What's the smartest way to think about this?
- AYou have $60, so the $30 is fine.
- BScheduled bills don't count until they're paid.
- CWithdraw all the cash so the bill can't take it.
- DAbout $15 is really available once the bill comes out.
D. About $15 is really available once the bill comes out.
$60 − $45 = $15 truly available. Spending $30 would push the account negative when the bill hits, which could mean a declined payment or fees.
Check for understanding · 2 of 3
A debit card spends money you already have, while a credit card spends money you're borrowing.
- True
- False
True
Debit pulls directly from your checking account. Credit is a loan from the card company that you repay later — with interest if you don't pay the full balance.
Check for understanding · 3 of 3
Account A has no monthly fee and no minimum balance. Account B charges $12 a month unless you keep at least $1,500 in it. You usually keep about $300.
Which account costs you less, and by how much per year?
- AAccount A, by $144 a year
- BAccount B, since it's probably a better bank
- CThey cost the same
- DAccount A, by $12 a year
A. Account A, by $144 a year
With $300, you'd never meet Account B's $1,500 minimum, so you'd pay $12 × 12 = $144 a year. Account A costs nothing.
Remember
Key takeaways
- Checking is for everyday spending, not for growing money.
- Debit spends your money; credit borrows money.
- Watch for monthly, overdraft, and ATM fees — many accounts have none.
- Subtract upcoming bills before deciding what you can spend.
- Insured deposits are protected up to $250,000 per depositor, per institution, per ownership category.
Discuss
Talk it over
- Why might a bank offer a free checking account? How does the bank still make money?
- What alerts or habits would help someone avoid overdrafts?
Exit ticket
Name one fee a checking account can charge and one way to avoid it.
Answer on your exit ticket before you leave.
Nice work today.
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learnwithflc.org/courses/money-fundamentals/checking-accounts
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