How to Balance Your Checkbook

When someone balances a checkbook, it means they’re comparing a checkbook to a bank statement and reviewing bank transactions. Balancing a checkbook may also help bring attention to any banking errors. Record any pending transactions in your checkbook register, including both debits and credits, as well as checks you’ve written that have not cleared yet. 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. When you’re done reconciling your transactions, add up the cleared charges on your checkbook register or spending tracker.

Most people don’t use actual checkbooks for regular transactions these days, but the name still sticks—like “filming” or “taping” a video on your iPhone (even though you’re not using actual film or tape). In this case, you can usually spot the issue by going through your online transaction history and locating the missed charge. You may also want to double check that your autopay transactions are processed for the amount you expected, and that your bill didn’t increase from one month to the next.

Review your transaction history and compare it to your bank statement

You may prefer online and mobile banking for checkbook balancing if you don’t write paper checks or only write a few each month. Keep in mind that checks won’t show up in your transaction history until the transaction has been posted, so you still need to keep track of those amounts when calculating your current balance. Along with allowing you to easily record lots of different types of transactions, these digital tools also can help you budget and do the math for you — things a checkbook register can’t do. A checkbook register, notebook or spreadsheet on your computer can all work as a register.

  • Dummies has always stood for taking on complex concepts and making them easy to understand.
  • With the advent of online commerce and banking, more people are making purchases and paying bills online, thereby reducing or eliminating the need for paper checkbooks.
  • Balancing a checkbook may seem antiquated in this age of online banking and mobile banking apps.
  • However, checks can take up to a few days to process and clear, or the recipient may not cash them right away.
  • There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

Look through every transaction on your bank statement (or online) and compare any checks paid to your check register. Reviewing your transactions lets you find any pesky, bank account-draining charges like these and take care of them for good. When you’re checking your account statements and transaction history regularly, it’s more likely that you’ll be able to spot any suspicious transactions. For example, a small deposit of a few cents or a $1 debit transaction could be evidence of a scammer testing the waters before launching a larger-scale attack on your account.

For example, if you send the phone company a check for $100 but your actual balance is only $75, then that check will bounce. When the phone company presents that check to your bank for payment, it will get a notice that your account has insufficient funds. Your bank will charge you a fee, in the range of $25 to $50 (this is a fee that you should ask about when opening an account) and the other party’s bank will charge them a fee, as well. So bouncing a check is not only embarrassing, it can be quite costly.

In addition, it is harder to find banking errors if you do not keep your own records, since you will be working from the bank’s numbers at all times. However, even though the paper-and-pencil aspect of checkbook balancing has mostly gone the way of the dodo, the process is still a necessary part of maintaining your checking account. But whether you were a master checkbook balancer in the time of paper or are a digital native who didn’t realize paper statements were once a thing, you may not know exactly how to reconcile your accounts.

Balancing a checkbook today

Of course, some people prefer to just log in to their bank’s mobile app and view their current balance. However, this doesn’t account for pending charges, checks that haven’t been processed, etc. An up-to-date check register will always tell you exactly where you stand at any time, without surprises or needing to rely on a mobile app.

Is Balancing a Checkbook Necessary?

While some banks offer free assistance, others may charge a fee, so be sure to check with your bank to see if you need to pay. You can create your own transaction register on an open-source spreadsheet platform, such as Google Sheets. This will mean you can access it from your phone, allowing you to make note of your transactions while you’re out and about. You also will be able to access your spreadsheet from your laptop when you’re ready to balance it. One easy way to review transactions is to mark the transactions that are legitimate and that you’ve cross-referenced with your check register. Assuming all the transactions from your statement and your register match, the end balance showing for each one should also be the same.

It reminds you of fees and subscriptions

Each time you enter in a new transaction, make sure to update your balance. This will be your actual balance, which is a better picture of how much you have to spend because it includes payments that might not have hit your bank account yet. You may already record the checks you’ve written in your check register, but there are additional ways to track the activity in your accounts. Do you want to know exactly how much you have available to spend from your bank account? Would you like to catch errors (including bank errors and mistakes you’ve made) before they cause major problems?

You will have fewer transactions to comb through if you balance once a week or once every two weeks. Setting up text or email notifications can make it easier to keep track of new credit and debit transactions without having to log in to your account. Using your bank records, update your check register with any transactions that you did not previously record. You might choose an app, spreadsheet, checkbook register, or a notebook and pencil.

How to balance your checkbook

The key to this approach is making sure that you enter new credits and debits in a timely manner. Otherwise, you might forget about a transaction, which would result in an incorrect balance. In decades past, “balancing your checkbook” was a much more literal term. It involved writing down individual transactions in a check register as you spent and deposited funds throughout the month, tracking your ending balance at all times. Before debit cards, these transactions were usually made in the form of paper checks.