Balancing your checkbook is a fundamental habit for smart money management. Many people find it tedious and consider it old-fashioned, so it is regularly neglected. Even in this digital age, there are benefits to balancing your checkbook, including avoiding bounced checks and overdraft fees and identifying possible fraud.
Using ATM receipts to check your balance is not recommended. Those give you just a quick snapshot of what is in your account at that moment. ATM receipts do not include uncashed checks, account fees, or deposits that haven’t posted to your account yet.
When you balance your checkbook, you are verifying that your records match the bank’s records, as shown on your monthly statement. Balancing your checkbook can also be an important step in defending against fraud. Identity thieves often try to pass through small transactions to see whether it triggers a response. If those go unnoticed, the fraudsters may try to dip in for additional amounts.
Whether you’ve just opened your first bank account and have not yet learned how to balance your account, or you’re a checking account veteran who just never got into the habit, we have some easy how to’s for you:
- Figure out your current available balance. Log this amount at the top of your check register.
- Record pending transactions in your checkbook register (subtract transactions from the available balance or add to the balance for deposits).
- Make sure to include debits, credits, as well as any checks you’ve written that have not cleared yet.
- Compare the ending balance you come up with to the balance on your bank statement. If it matches, what you have in your checkbook after all deposits and withdrawals have been accounted for, which means your checkbook is balanced.
If your balance and your statement balance are not adding up, go back through each transaction and use a calculator to spot any possible math errors. Check for any transactions that the bank has recorded, but you have not. Look for transposed numbers etc. If you come across any charges that you did not make, notify us immediately.