How to Balance Your Checking Account
In an age where calendars are computerized, photos are files, and documents are downloaded, the humble checking account register is often ignored. But, if you’ll take 15 minutes to balance your checking account, you’ll stay on top of your budget and avoid bounced checks and overdraft fees.
The point of balancing or reconciling your checking account is to make sure you and the bank agree on how much money is in your account. That means you have to keep a record of your spending. The easiest way to do this is to write every transaction in your checking account register when the transaction takes place and keep a running balance.
Another option is to save all your receipts, and either enter your transactions into your register or, if you want to be super-nerdy about it, a spreadsheet. You’ll still need to keep a running balance every day.
The next step is also up to you—you must actually open and read your account statement from your bank. Whether you get your statement by mail or online, you can no longer ignore it. Open it up, and get to work!
The Balancing Act
Start by comparing transactions on your statement with your register. Make a checkmark in your register for every transaction included on your statement. Be sure all entries on the statement are written in your register, including any bank fees or service charges.
If you’ve been keeping good records, you’ll notice transactions in your register that aren’t included on your statement yet. Good job! Start with the ending balance on your bank statement and add the deposits that aren’t on the statement. Then subtract any transactions that aren’t on the statement. The total should match the running balance on your account register.
If the numbers don’t match up, you’ve probably forgotten to record a transaction. Look over your statement and try again. If it’s been a while since you balanced your checking account, you’re probably not going to get it balanced this month. Just total things up the best you can and continue keeping your records. Next month, if you’re off by the same amount, you can assume you’re on track. Just make the correction in your register.
Don’t use ATM receipts as a method of checking your balance. The balance printed on your receipt is just a snapshot of how much is in your account at that moment. It will not reflect any checks, debits, fees or deposits that haven’t posted to your account.
You may find it easier to balance your account a couple of times a month if you have online access to your checking account. The important thing is that you actually do it.
Balancing your checkbook is a lot like working on your budget. It can be difficult to get all the numbers to work right when you first start, but the process gets easier the more you do it. Once it’s done, you’ll feel much more confident.
Budgeting your money also helps you keep control of the money in your account. Check out Dave's online budgeting tools that you can access at any time!