How To Balance A Checkbook

Knowing how to balance a checkbook is important to keeping your checking account financially sound. Your checking account is the foundation for the rest of your financial life. If you aren't sure exactly how much money you have, you won't be able to handle your money correctly. Having a balanced checkbook is just the start of good personal finance management.

The Importance Of Balancing Your Checking Account
Checks and debit card transactions don't get withdrawn from your checking account immediately. When you spend money, it could take a day or even a few weeks for the money to clear. The balance that shows up when you check your balance at an ATM or when you check your balance online may not be the exact amount of money that you have. You need to track your spending so you'll know just how much you've spent.

Tracking Your Spending
In order to balance your checkbooks, you'll need to start noting the payments you make each time you spend money with a check. You should write down the transaction in your register, or use a computer program like Quicken to keep track of your spending.

Today, most people use their debit cards to pay for items, rather than paper checks. Make a habit of keeping your receipts so that you can track these purchases as well. If you treat debit transactions just like checks, you'll be able to stay on top of your balances.

Update Your Register Every Night
You can use a paper register or a computer program to help you balance your checkbook. Each night, write down the new expenses, and subtract them from your balance. Use a calculator to make sure that the transactions are being recorded correctly. Be sure to account for any deposits that you made as well.

Balancing Your Register Monthly
Once you receive your monthly statement from your bank, you need to balance it with your checking account register. Go through the monthly statement line by line, and put a check mark on your register next to the items that are recorded in the monthly statement. For example, if you have a withdrawal from an ATM on the 6th for $40, look for that transaction on your register, and put a check next to it.

If a transaction shows up on your monthly statement that isn't on your register, you need to add it immediately. Make sure to add any unrecorded transactions to the total, and then you'll really know how much money you have.

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