More important, tracking your balance can help you avoid the possibility of having an overdraft in your account. Considering that the average overdraft earnings before tax ebt fee is around $35, it is better off avoided as much as possible. I think it’s best to do this weekly, though you can set your own schedule.

Be careful of unfamiliar charges, such as overdraft fees, on your statement that you hadn’t noted in your register. If you still can’t balance the figures, you can ask your bank for an extensive review of your transactions — but note that it may charge an account research fee of about $25 an hour. Your credit union or bank will issue a regular account statement, typically once a month. This usually lists the balance from the previous month’s statement, along with deposits, other credits, debits and checks that have cleared the bank.

That’s only a problem if the preauthorized amount is wildly off, such as a $1 hold on what’s ultimately a $50 tank of gas. But if you have a lot of those, it’s not much different from checks. The biggest banks are corporations, and I don’t trust any corporation as far as I could throw its board of directors.

How to Balance a Checkbook

If you hate that part of the month as much as I did, that should be enough motivation to kick your checkbook to the curb. That helps catch any transactions that lagged behind the last time. You see that with electronic transactions that use the ACH network (like e-checks) or certain types of debit card transactions, such as preauthorizations.

  • To balance it, you compare your register to your bank statement or online bank account, checking off any amounts you confirm.
  • Just make sure it doesn’t happen too often, as even the bunker fund can run dry.
  • That’s your starting total, your current balance, and the start to your journey on how to balance a checkbook.
  • At the end of the month—or more frequently—you can use your bank statement, checkbook register, and check carbon copies to make sure your checkbook entries and account match.

The paper checks in a checkbook are legal documents in that they represent an agreement to pay a specific amount of money to whomever you’re making it out. Additionally, the last few sheets in a checkbook typically include several deposit slips. If you don’t regularly write checks, balancing a checkbook may not be necessary. That Gomez, Gomez recommends reviewing your spending consistently through a spreadsheet or budgeting app, even if you don’t write physical checks. If you regularly use checks, you should try to balance your checkbook each month as soon as you receive your bank statement. If you use your checkbook, you’ll go line by line and either subtract or add each check.

Why balancing your checkbook is important (yes, even if you don’t write checks)

If you’re not using your checkbook, go through your checkbook and add up all your bill payments for the month. Then, you’ll go through your bank statement and factor in any other transactions not listed. Expenses should be subtracted from your total, and payments should be added. If you miss this transaction and fail to balance your checkbook at the end of the month, you could overdraft your bank account and end up with a large overdraft fee. Apps like Mint, Personal Capital, You Need A Budget (YNAB), and others link with your checking account and track your transactions.

If you have any checks going out anytime soon, now’s the time to mentally delete that amount from your checking account until it really comes through. If you see any you don’t recognize or question the amounts of, you can check the receipts. It’s helpful to go all the way back to a couple of days before the last date you checked unless you do it daily. For example, if you check your account on Saturdays, go back to the previous Thursday to see if any new transactions came in. That said, if you only write one or two checks per month and those checks are specific ones for the same amount each month, such as rent, you can probably get away without it.

Include the date of the transaction, a description of the transaction, and the amount. Some people like to use duplicate copy checks so they always have a record of who they issued a check to and for what amount. There are a number of programs available that will automatically track your banking information for you, such as and Personal Capital. These aggregators allow you to see an overview of all of your financial accounts in a single place, from your checking and savings accounts, to your loans, to your college savings account. Such an aggregator will do the tracking and recording for you, so all you’ll have to do is check it regularly and compare it to your banking information to make sure everything balances. First, keeping a balanced checkbook means you know where your money is going each month and how much is coming in.

How to balance a checkbook

No, your job is to spot these imbalances and get them cleared up with your bank as soon as possible to help keep yourself on track. Not to mention overdrafting normally leads to bounced checks, which will end up being an unpleasant experience for both you and the person trying to cash it (mostly for you, though). If everything is fine on your end, check with your bank to see about any other potential transactions that may not have come from you or that you may have missed.

The biggest inaccuracy you are protecting yourself against by balancing your checkbook is fraudulent activity on your account. One way these identity thieves start going about taking over your account is by sending transactions for very low amounts – a couple of dollars that might go unnoticed if you don’t pay full attention to it. Now, even if your checkbook is finally balanced, it doesn’t mean you can rest easy.

Do You Still Need to Balance Your Checkbook?

Now it’s Wednesday night, and you’re ready to go out for a weekly dinner with friends. If you forgot to record the rent payment on Monday, you might have to scrimp ’til payday because you unintentionally strained your budget. By keeping track of your spending as you make each purchase and keeping track of your checking account balance after each purchase, you’ll be far less likely to ever overdraft on your checking account. Personal finance apps such as Mint can help you keep tabs of your expenses and deposits without the hassle of tracking everything with paper and pen. Statements can be pulled from your online bank data with a push of a button. Most of these apps let you review your account activity from your smartphone for easy tracking and some even include a “balance and reconcile” feature.

Basically anything that will interfere with your register balance. It’s mostly just a matter of dedication and meticulousness, much like how anything related to budgeting usually is. All users of our online services are subject to our Privacy Statement and agree to be bound by the Terms of Service. Health Savings Accounts can help you save money on medical costs and be used for long-term tax-free savings – as long as you have a high deductible health plan. These checkmark boxes might have their own separate column or be found next to the withdrawal or deposit columns. The Cleared or Checkmark column is where you can keep track of whether a transaction has gone through or not.

Staying on top of balancing your checkbook will make you a skilled manager of your personal finances and give you a significant advantage in achieving your financial goals. If the numbers don’t add up, you will want to compare your bank statement with your checkbook register and identify where the difference lies. It’s a good idea to note down the payee in the case of checks to help match them up more easily.

That’s true whether you key in the number yourself or pay the amount recommended by the vendor. That means these electronic transactions have a much lower error rate than old-fashioned methods like paper checks and cash. Ensure you log the running balance as you go to avoid losing track of where you stand after each transaction. At least once a month, but preferably every two weeks, check your current balance on your account online and compare the bank’s record with your own.

Do make sure to write the date as well as the amount in so you can find them easily if someone requires confirmation of a payment or a different issue arises. Technology makes it easier than ever to monitor your transactions on a regular basis. By learning how to balance a checkbook you may notice many perks like . Learning how to balance a checkbook registry can sound really daunting to someone whose never really used one before. For a thorough discussion and example of balancing a checkbook see our major topic Bank Reconciliation and our Bank Reconciliation business forms referenced below. Of course, the offers on our platform don’t represent all financial products out there, but our goal is to show you as many great options as we can.