Cash Flow, and When the Money Actually Moves

by bam

A bill is due on the first and the paycheck lands on the third. That is not a budgeting failure, it is two calendars that were set by different people under different rules, and this course is about those rules. It teaches no budgeting technique at all, on purpose: budgeting has no mechanism, no decision-maker and no recourse, while timing has all three and every one of them is public. When money arrives is a federal schedule. The Expedited Funds Availability Act and Regulation CC say how soon a bank must let you use a deposit, and the answer depends on what you deposited, where you deposited it, and what time of day the bank says its day ended. Cash handed to a teller is one rule, a payroll direct deposit is another, a government check is a third, and an ordinary check is a fourth, with six named exceptions that can extend any of them and a written notice owed to you whenever one is used. When money leaves is a different kind of rule and a much shorter one. The Uniform Commercial Code says a bank may charge items to your account in any order it finds convenient, which means the same four payments on the same day can produce one overdraft or three depending on a sequencing choice you never see. The course works that arithmetic rather than complaining about it, because the arithmetic is the part you can act on. Then the rails: cash, check, an automated clearing house credit, a card, a wire, and instant payment, six ways money moves with six different clocks, and only some of them are what the availability rule calls an electronic payment. Then the paycheck itself, where the arithmetic surprises people: weekly is fifty-two paydays a year, biweekly is twenty-six, semimonthly is twenty-four, and biweekly and semimonthly are not the same thing even though both are often called twice a month. Federal law sets a regular pay day and does not set how often it comes; your state does, and the statute has a number in it. A Social Security payment date is set by a published rule keyed to a birth date, which means it can be computed a year ahead. The course closes on the two questions worth knowing the answers to: which of these timings is a legal duty with a remedy attached, and which is merely the way a bank has chosen to run its day. It ends by having you map your own dates, request your own bank's availability policy, which any person may ask for in writing, and read your own state's payday statute. It is information about how the payment system keeps time, not advice about your money, and it says so in three separate lessons.