Make sure you didn’t record anything incorrectly, duplicate entries or include anything after the statement date. If numbers aren’t adding up, look back and find discrepancies. This way, you’ll know when a new set of transactions begin. Good job! Draw a line across the register and mark the date and balance. If your ending balance matches the bank’s, you have a balanced checkbook. Use it to ensure every transaction in your log (including pending payments) matches your statement. Open the statement - which is essentially the bank’s version of your checkbook register. You’ve reached the end of the month with your bank statement in hand or eStatement on screen. Subtract these from your balance and write down the new balance. Venmo) and automatic or recurring payments. Also known as debits, these may include written checks, fees, online or in-store debit card purchases, peer-to-peer payments (i.e. Record all payments and feesĮither in real-time or on a regular basis, record outgoing transactions and their descriptions in your register. Add each of these to your balance and record the new balance. Credits include direct or cash deposits, paychecks and any other credit amounts (such as corrections by vendors or institutions). Now that you have your starting balance, regularly record your deposits and all corresponding information about those deposits in the appropriate columns. Record credits, income and interest earned This is the first thing you’ll record in your register. Log into your checking account (or call your bank) to find out your current balance. Balance (calculated after each transaction is recorded).Deposit amount (which you’ll add to the balance).Withdrawal/payment amount (which you’ll subtract from the balance).Transaction description (i.e., electricity bill or check purpose/recipient).If you’re creating it manually, make sure you include: You could use the log in the back of your checkbook, or record transactions in a spreadsheet or an app. Get out your checkbook register or make oneĪ checkbook register, also known as a check ledger or balance book, is a record of your transactions –– whatever is coming into or going out of your checking account. So, what does it mean to balance your checkbook? Below, we list the steps for balancing your account: 1. Today, you probably receive electronic statements (eStatements) and use a physical checkbook register, budgeting app or your own spreadsheet to track your transactions. SHOULD I BALANCE MY CHECKBOOK WITH ONLINE BANKING HOW TOHow to balance a checkbook in 6 stepsīalancing a checkbook used to be all paper. It’s one less thing to track or worry about if something gets overdraft by human error. Tip: Start with a checking account with no overdraft fees. Balancing your checkbook can help you avoid overspending, overdraft fees (especially if you don’t have overdraft protection) and bounced checks. You can make mistakes: Mathematical errors happen all the time.When you keep tabs on your account, you can catch fraudulent debit card charges quickly, report them and hopefully get your money back. Sometimes, it can start with smaller transactions that go unnoticed. It can catch fraud: Fraudulent activity on an account doesn’t always have to be a lump sum of money.When you balance your checkbook, you can understand your spending habits and use that to create a better budget. It makes it easier to budget: To track your transactions is to track your spending and saving.Banks and vendors can make mistakes: Keep an eye on your monthly transactions to catch when a bank or vendor makes a mistake, like processing a payment twice or charging the wrong amount.It’s a healthy financial habit to keep an ongoing record of your transactions (and balance that record regularly) for several reasons: Rather than thinking you still have $500 to spend, you can keep track of that $200 outstanding check (and your actual $300 bank account balance) by balancing your checkbook. That check hasn’t been cashed, so it won’t show up in your account just yet. But you recently wrote a check to a friend for $200. Whether you compare transactions using paper statements or online records, the goal remains the same: to know your true balance and catch costly mistakes.įor example: Let’s say your checking account balance is $500. By balancing, you’ll access all your transactions, including direct deposits, ATM withdrawals, automatic bill payments, checks and more. Even though digital banking does a solid job of keeping track for us, you can still check yourself to ensure there’s no fraud or error taking place and you’re not overspending.
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