How To Avoid Losing Your Paycheck

May 23, 2007

Several months after getting married my cleanly wife was a little too ambitious in her cleaning and threw her first paycheck in the trash. Luckily, I discovered it the next day before the trash man came and after an hour of digging through the dumpster in our apartment complex I unearthed the precious check. Needless to say she’s been signed up for direct deposit ever since.

Automate Your Paycheck
Our human resources department sent out an email the other day reminding us that the replacement of lost payroll checks requires a notarized Affidavit and Indemnity form. To avoid going through such a hassle they recommend using on of two different methods to get paid electronically.

Direct Deposit
This method makes use of the Automated Clearing House (ACH) to deposit DirectDeposityour paycheck directly in your bank account. This method is usually a breeze to setup. You supply your employer with your bank account number and the bank routing number, both of which you can find on the bottom of your checks, and they’ll electronically transfer money into your account.

I’ve been using direct deposit for years and it makes life much easier. The nice thing about getting paid with direct deposit is that your money shows up in your account the day you’re paid and you don’t have to hassle with going to the bank to deposit a check.

Prepaid Visa Card
Some employers offer a prepaid card system that allows them to deposit the balance of your paycheck directly onto your prepaid cash card, ours AdpTotalPayuses ADP Total PayCard but I’m sure there are similar cards available from other merchants. I checked out the card website to read about the card’s benefits.

You can use the card at any merchant where Visa is accepted. You can also use the card to withdraw money from an ATM but you want to be sure to use an in-network ATM to avoid paying a withdrawal fee.

One nice feature, if the card is lost or stolen fraud protection from Visa will cover its replacement so you don’t lose any money. The ADP website points out you can use the card as a budgeting tool. You can deposit a portion of your paycheck on the card and designate the card to be used only for certain items. Of course you’d have to use this in conjunction with direct deposit for the remainder of your pay to avoid hassling with a paper check.

I don’t know what happens if you try and spend more than the available balance on the card but that’s an important question to ask when signing up for a prepaid card. They could potentially charge you fees for spending above the card’s balance which you’d definitely want to avoid. Another thing to watch out for would be if they let you charge over your paycheck balance but then charge interest on the overage.

Enter the Digital Age
Whether you use direct deposit or a prepaid card, getting rid of your paper paychecks has many benefits. If you’re not convinced, just wait until you’re digging through a dumpster looking for the paycheck you threw away by accident and you’ll come around. Are there any other ways to get paid electronically that I missed?


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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5 Responses to How To Avoid Losing Your Paycheck

  • Her Every Cent Count

    …Alas, if only my employer was willing to provide direct deposit, I would have jumped on the opportunity a long time ago. It’s such a great service, although sometimes, I must admit, it’s nice to have an excuse to actually visit the bank and talk to real people who are handling my money.

  • b

    Awesome post. I’ve forgotten how convenient it is to have direct deposit. My current company doesn’t offer it, but I’m going to bring it up for sure! That debit card thing seems like a good way to control reimbursable expenses, too.


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