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How To Balance a Checkbook in 5 Simple Steps

how to balance checkbook

This usually lists the balance from the previous month’s statement, along with deposits, other credits, debits and checks that have cleared the bank. It will also include your ending account balance on the date the statement was generated. Though both parts of the word “checkbook” are quickly becoming meaningless, being able to reconcile your accounts will always be an important part of financial health. Plus, with the addition of digital banking services like automatic bill payments and mobile deposits, it’s critical to know when your money is in motion.

Benefits of Balancing Your Checkbook Regularly

If your check register and bank statement don’t balance, double-check your math to see if there are any adding or subtracting errors on your register. At the end of the statement period, use your check register to match the balance and each transaction to your bank statement. If your balance and transactions match up, your work is done, and you can start logging transactions for the next month.

  1. You may prefer online and mobile banking for checkbook balancing if you don’t write paper checks or only write a few each month.
  2. Though both parts of the word “checkbook” are quickly becoming meaningless, being able to reconcile your accounts will always be an important part of financial health.
  3. The Experian Smart Money™ Debit Card is issued by Community Federal Savings Bank (CFSB), pursuant to a license from Mastercard International.
  4. 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.

Step 5: Verify All Check Payments

If one large balance each month isn’t something you’re comfortable with, daily check-ins through your bank or personal finance app may be a better solution. Recheck for any uncleared transactions to clear each day and check them off as they clear. If a transaction remains uncleared for 60 days, contact the person or company you paid to sort out the issue. If the result is a standard dollar and cent number, such as 2.95 — not 2.956 — then search for that number in your checkbook register. You accidentally added it when you should have subtracted it or the other way around.

What Is Balancing Your Checkbook?

Now you’ll be able to compare your check register to your bank statement. The total from your calculations should come out to your current bank statement for the month. Keeping tabs on how you spend double declining balance method ddb formula calculator is crucial to figuring out how to implement a budgeting system that works. If you commonly write checks to pay bills, you’ll want to balance it out each month to understand your spending habits.

how to balance checkbook

If an outstanding transaction hasn’t cleared your statement in 60 days, contact the person or company you paid to see if there is an issue. If the person or company lost or never received the check, call your bank to stop payment. What you probably have at all times, however, is your cell phone. You can create your own transaction register on an open-source spreadsheet platform, such as Google Sheets.

how to balance checkbook

Budgeting apps are another option for managing checking account activity. These apps link to your checking and other financial accounts (including credit cards and savings accounts) and automatically record new transactions for you. You can balance your own checkbook by keeping a paper or digital log of bank account transactions that you can compare against your bank statement each month.

You can also review your register for mathematical errors that would result in an incorrect balance. You simply write down transactions as they happen, adding or subtracting the appropriate amount from your balance. At the end how puerto ricans are fighting back against using the island as a tax haven of the month, you compare the ledger with your account statement to balance your checkbook. You may prefer using a budgeting app if you have multiple bank accounts or credit cards, as it’s easier to see them all in one place.

The term “balancing your checkbook” sounds like it might only mean tracking check payments, but it involves tracking every bank transaction and double-checking them against your monthly bank statement. 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.

In this case, compare all your canceled checks and receipts to your check register to find the transposed number. This can happen due to a math error, a transposed number, an unrecorded transaction, or possibly a misapplied debit or credit. As with your outstanding payments, there may be a space on the back of your monthly statement to note these outstanding debits. Make note of the dates, descriptions, and amounts of any check, debit, or ACH payments listed in your check register but not on your statement — the ones without checkmarks. Verify the amount you entered in the check register matches the debit amount on your statement. Place check marks on your check register and statement next to all matching transactions.

Once you’ve decided how to log transactions, put your starting bank account balance at the top right of your table. If you pull your balance from an online banking dashboard, use your “available balance” because this figure should include pending transactions. If you don’t have a check register, you could download a free check register template online or create one that works for you with an app or notebook. Below is an example of the column headings to include on a do-it-yourself check register if you create your own.

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