How to Balance a Checkbook

how to balance a checkbook

You add or subtract the corresponding amount to arrive at your new account balance. This can help with balancing your checkbook at the end of the month. If you don’t regularly write checks, balancing a checkbook may not be necessary. That Gomez, Gomez recommends reviewing your spending consistently through a spreadsheet or budgeting app, even if you don’t write physical checks.

Step 3: Check All Transactions

Before debit cards, these transactions were usually made in the form of paper checks. To protect against losing track of your balance and getting hit with an overdraft fee, you need to balance your checkbook — sometimes called a check register. You do this by manually recording every transaction, whether it’s a debit card purchase, writing a check, an automated payment, or a deposit. The second benefit to balancing a checkbook is fraud prevention. 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.

Balancing a checkbook for a better future

Most financial institutions have a window for when discrepancies can be brought to their attention. 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. There are also many third-party check services that offer personalized check designs and unique options.

Learning to balance a checkbook

  1. You simply write down transactions as they happen, adding or subtracting the appropriate amount from your balance.
  2. Include the date of the transaction, a description of the transaction, and the amount.
  3. Once you add back withdrawals or subtract deposits, your current balance and statement balance should be the same.

If you don’t order paper checks or otherwise don’t want to use a paper register booklet, you can accomplish the same thing with a piece of paper, small notebook, or custom printed ledger. You can create your own or download printable options online. There are many free checkbook balancing forms available and you can even buy fun, downloadable options on sites like Etsy. If you miss this transaction and fail to balance your checkbook at the end of the month, you could overdraft your bank account and end up with a large overdraft fee. Though we live in a world where so much is automated, there’s still a need for manual work to ensure everything is correct.

What are the 4 rules to keeping a checkbook balanced?

how to balance a checkbook

One of the biggest benefits to balancing your checkbook is that you can quickly spot potential fraud and mistakes. If you are unable to find any math errors or missed transactions but your checkbook still doesn’t balance, consider going through and looking for signs of fraudulent activity. Apps like Mint, Personal Capital, You Need A Budget (YNAB), and others link with your checking account and track your transactions. You often must log in and categorize these transactions, which will be the perfect time to also check these transactions off in your check register.

Leave and uncleared transactions in your check register unchecked. 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. Figure out your current balance in checking, which your bank may list as your available or ending balance.

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. For more detail, review our guide to writing a check and entering transactions into the check register. This interest payment is usually one of the last transactions on the statement. Enter the amount in your check register as you would any other transaction.

You should be able to find this amount by checking using your online or mobile banking app. Log this amount at the top of your checkbook register in the space indicated. The reality of online banking is that there is still a lag between when money enters or exits your account. Your current bank statement depends on the type of transaction that has or will occur in the future. Paying by check, for example, can take several business days to reflect on the running balance, depending on how and when the payee processes the check. If you want to match your current account balance to the balance showing on your bank statement, you can do that by factoring in transactions posted after the statement date.

Yes, our online banking apps and websites track our transactions, but some transactions take time to post. If your bank charged you any service fees for writing checks, accessing out-of-network ATMs, or any other service, find these charges on your statement and record them in your check register. If your the notion of accounts payable and the method of work with them bank reimburses ATM fees, find these reimbursements on your statement and enter them as deposits in your check register. These steps help you keep your checkbook balance up to date so you always know exactly how much money you have in your checking account and there are no unrecognized transactions.

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. 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.

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