How To Balance a Checkbook

In the age of smartphones, balancing a checkbook can sound like an archaic activity, something people did back in the good old days of landlines and video rentals. Despite popular belief, however, keeping a record outside of the online register is a good idea for achieving true financial responsibility and a solid bank account balance. Figure out your current balance in checking, which your bank may list as your available or ending balance.

What does it mean to balance a checkbook?

This is easy to do with most banks, which offer a chronological log of all transactions, sometimes even by category. You’ll likely find that there is a bit of a lag between your purchase and when it posts to your account, but checking your bank’s mobile app or current statement log is a great way to double-check your records. 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.

How To Balance A Checkbook

If you’re using the checkbook register method and comparing transactions with your account statement, you should balance your checkbook every month. If you’re using online banking or mobile banking to track your accounts, you can log in daily to view new credit and debit transactions as well as balance information. Balancing a checkbook might not look the same for today’s banking customers as it did a few decades ago, but that doesn’t mean that maintaining an up-to-date account ledger isn’t still important.

Step 3: Contact Your Bank

Considering that the average overdraft fee is around $35, it is better off avoided as much as possible. Before using the checkbook balance calculator be sure any interest and other automatic https://www.online-accounting.net/ deposits or withdrawals in your bank statement have been included in your checkbook balance. Your record balance online should match the physical record or account statement.

1. Keeping a running log ensures the money earned stays in your account where it belongs.
2. Mistakes are costly and if you don’t pay attention, bank fees can creep in without warning.
3. Although your bank processes thousands of transactions accurately, it can make mistakes, and you typically have only 60 days to inform the bank of the error.
4. If your account offers interest on the balance held, this added deposit could throw off your checkbook balance.

Keeping careful records may inspire you to start saving a little more, investing and building a nice financial safety net. As long as you’re able to record the pertinent details of each transaction as you go, it really doesn’t matter what you use to balance your checkbook. It’s true that fintech can make managing your money easier but there are still very good reasons to make balancing your checkbook part of your financial routine. 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.

Balancing your checkbook is a method of verifying that your records (your checkbook register) match the bank’s records, as shown on your monthly bank statement. For example, identity thieves may try to pass through a small transaction of just a few cents or dollars on your checking account to see whether it triggers a response. If it goes unnoticed, they may try to dip into your account for a larger amount. You simply write down transactions as they happen, adding or subtracting the appropriate amount from your balance.

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. While some people really enjoy putting pen to paper, others fiercely prefer the convenience and ease that technology offers. If you still can’t find the problem with your checkbook being imbalanced, contact your bank for further assistance reconciling your checkbook. Perhaps there’s a discrepancy in a pending transaction or a hold on your account that you’re unaware of that’s preventing you from having a balanced checkbook. Verify the amount you entered in the check register matches the debit amount on your statement.

Mistakes are costly and if you don’t pay attention, bank fees can creep in without warning. GOBankingRates‘ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology. If you come up with the same discrepancy a second or third time, consider whether you made a math mistake or if there’s another issue. Here are some common reasons that your checkbook might not balance and what you can do to prevent this issue moving forward.

Aggregators can be a great tool for anyone who wants to get a big-picture sense of their money. However, they can lull some people into believing that they are staying on top of their money chores because the aggregator does so much for you. If you simply let the aggregator do the work and never stop to check in, this kind of program will not https://www.online-accounting.net/what-is-a-balance-sheet/ replace manual balancing. You need to know what your money is doing and make sure you compare your (or the aggregator’s) records with the bank’s records. GOBankingRates works with many financial advertisers to showcase their products and services to our audiences. These brands compensate us to advertise their products in ads across our site.

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. 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.

In order to keep your checkbook balanced, there are four things you need to remember. This helps you understand how your cash flow shifts throughout the month and how much (and when) you can spend. When you find this number and verify the math mistake, reverse it as needed and rebalance your check register. Run through your outstanding payments and debits and verify they are accurate. Maybe you missed a cleared transaction on your statement or thought you saw one clear your statement that actually hadn’t. For example, if you see a higher-than-expected charge for a particular debit card transaction, contact the company to discuss why that’s the case.

If you’ve combed through your account statements and still can’t get your checkbook to balance, you should call your bank to ask about any pending debit or credit charges you may have overlooked. how to calculate cost of inventory You add or subtract the corresponding amount to arrive at your new account balance. Balancing a checkbook consists of checking that your records match up with what the bank has for your account.

Some banks have more robust budgeting tools than others, which may make it easier to track transactions and even reconcile external accounts using the same software. A paper check register is still one of the simplest ways to balance your checkbook. These little booklets are usually included when you order paper checks and offer you a quick way to record transactions no matter where you are.