How to Balance Your Checking Account
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Learning how to balance your checkbook can help you spot money leaks, avoid fees, and help you move closer to your financial and personal goals.
Why You Need to Balance Your Checking Account
As much as I love apps, sometimes going old school can be a boost to your finances. Balancing your checking account can help you stay on top of your money.
Banks can make mistakes, both in your favor and to your financial detriment.
Having a separate way to verify your account balance is a way to keep them on your toes.
Simply using your ATM receipts can also be misleading. When you get your receipt, it's simply a snapshot. It doesn't show pending balances.
Another benefit is if you keep your check register up to date, you'll reduce or eliminate any overdraft charges.
Getting a Check Register
When you receive your box of checks you may have noticed a few check registers included.
You can also get more from your credit union or bank if you have ran out of them or lost them.
If you prefer a more electronic version, you can download a free printable excel check register.
Using a Check Register
As you make transactions throughout the month, go ahead and record on your personal check register.
When you receive your monthly banks statement (electronic or paper), pull out your check register and use the following steps to make sure everything is alright.
- Check all your deposits. Mark off on your register all your deposits into the checking account.
- Check all your checks and bill payments. Mark off them on your register as well.
- Review all your ATM withdrawals. As you mark them off, remind yourself what you spent the money on. You may discover a money leak.
- Verify all your check card transactions. Double check to see if everything matches up.
- Closely check any fees or interest earned for your account. If your bank is charging excessive fees, consider moving your money to a bank or credit union that values its customers better.
- Make sure your total and the bank's total matches. Don't stress over pending bills if the math adds up. Depending on your bank's policy, they can take a day or more to go through on your account. Call your bank if you notice any discrepancies.
The process in review your checking account doesn't take as long as many people think.
It's an extra step, but it adds a safety net to your financial system.
Thoughts on Balancing Your Checking Account
How many of you balance your checking accounts? How many do it regularly? Why or why not? How do you feel about your bank or credit union’s service?
I balance my check book every month. Years ago I wouldn’t and it was stressful even though I always had an idea of how much money was in the account.
Sometimes, I would forget about an ATM withdrawal or a check and end up overdrawn. So, once I started balancing my checkbook every month there’s no stress (at least in terms of my checkbook!).
I actually balance my checkbook regularly. A long time ago I developed a spreadsheet that automatically reconciles my balances as I mark the entered transaction cleared or (later added) since I use a debit card transactions are sometimes preauthorized in the amount of $1 and it will accomodate that as well. At the top of the screen I see what my balance is, what the bank balance should be and the amount of any outstanding items. It takes all of the pain out of balancing a checkbook. I also have a spread that functions like the “statement reconcilement” page that is printed on the back of the statement. Again, I just fill in the blanks and Excel does the math.
I once worked in customer service @ a bank and it was most frustrating for both our customers and for me when someone would come in and tell me that the bank had made an error but they did not keep a transaction register, or they would write in the amounts but never reconcile with their statement. If the bank makes a mistake, we are happy to correct it, but usually it turned out that the error was on our customer’s side. It is unpleasant to be in the position where you have to tell someone they made a mistake and that the fees they were charged will remain on their account. BTW rounding deposits down and withdrawals up can also lead to overdrafts even though it looks like it would not. Balance Balance Balance – it saves you money, time and frustration in the end.
Balancing your checking account seems like a hassle, but it’s totally worth it. It’s so easy just to think you can keep an eye on your account with online banking.
That’s a great convenience – but I’ve found if you don’t keep track of things yourself with hard copies – you find out about issues after it’s already too late.