How to Balance a Checkbook: 14 Steps with Pictures

Make sure you note those transactions in your personal record to avoid any surprises. There is also no shortage of financial apps and software to help with balancing your checkbook. This can happen due to a math error, a transposed number, an unrecorded transaction, or possibly a misapplied debit or credit. 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.

Is balancing a checkbook still necessary?

Expenses should be subtracted from your total, and payments should be added. You may use your checkbook ledger, the back of your bank statement, a notebook, or a spreadsheet. If there is a problem at some point, it’s much more difficult to wade through months of transactions to figure it out.

Fraudulent or erroneous charges

There may be a space on the back of your statement to note outstanding deposits. If you’ve tried all these and the balances still aren’t matching up, try taking a break for a while. You’ll be surprised how easy it is https://www.kelleysbookkeeping.com/money-measurement-concept-in-accounting-definition-examples/ to spot errors when you’re looking with fresh eyes. Go through everything line by line again, adding the balances up as you go. In order to keep your checkbook balanced, there are four things you need to remember.

Daily Check-Ins

Considering that the average overdraft fee is around $35, it is better off avoided as much as possible. The total you calculate should match the current balance of your checkbook. All information, including rates and fees, are accurate as of the date of publication and are updated as provided by our partners. Some of the offers on this page may not be available through our website. Your bank account balance at month’s end may end up being lower than expected if someone is making unauthorized purchases. It’s important to let your bank know about fraudulent charges right away because reporting it quickly can limit your liability for unauthorized charges.

There are also many third-party check services that offer personalized check designs and unique options. After all, you’re handing over very sensitive financial information as part of the ordering process. To balance a checkbook, you’ll have to fill out your checkbook register routinely. the 5 best accounting software for small business of 2021 Reviewing your bank statements and comparing them with your own records regularly will help verify that you and your bank are on the same page. Understanding how to balance a checkbook, also known as bank reconciliation, might not be as important today as it once was.

If you don’t balance your checkbook monthly, you might not even find the error in 60 days. Even more likely is the possibility that you made a math error in your checkbook https://www.kelleysbookkeeping.com/ register, which you’re unlikely to find unless you balance your checkbook each month. Compare all check payments in your check register to those on your monthly statement.

It will give you a clear sense of not only how much money is in your bank account, but where your money goes. It can also help prevent you from bouncing checks, stick to your budget, help you avoid fees, and detect errors from your bank or even fraudulent billing. If you are charged a recurring monthly maintenance fee, you can note this in your checkbook register each month.

1. While some banks offer free assistance, others may charge a fee, so be sure to check with your bank to see if you need to pay.
2. If your checkbook doesn’t add up properly, you may need to backtrack farther.
3. If you think a transaction is unauthorized or contains an error, look for instructions on your bank statement for how to get it corrected.
4. It’s useful for paying bills, depositing paychecks, sending money, and making purchases using a linked debit card.
5. You can balance your own checkbook by keeping a paper or digital log of bank account transactions that you can compare against your bank statement each month.

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. For example, fintech Chime is known for its award-winning app and budgeting tools that alert you to your daily balance, help track your budget, and even automatically add to your savings account. And Chase Bank offers a Budget tool that calculates your spending according to a set budget, offers Daily Pacing to track your progress, and lets you adjust your allocations as you go. If your checkbook doesn’t balance and your math isn’t the issue, check your bank statement to see if there are any bills that haven’t been processed yet. You may have some information on your bank statement that isn’t updated if you just sent a payment.

If you’re spending with a debit card throughout the day, this can be very easy to do, especially with small and easily forgotten purchases. If you use your checkbook, you’ll go line by line and either subtract or add each check. You’ll also write down any debit card or bank transactions for the month. When someone balances a checkbook, it means they’re comparing a checkbook to a bank statement and reviewing bank transactions. Balancing a checkbook may also help bring attention to any banking errors.

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.

To manage your checkbook, you must enter all your transactions into the check register so you can come back to them later for review. A well-maintained check register makes it easier to balance your checkbook and spot errors. First, keeping a balanced checkbook means you know where your money is going each month and how much is coming in. More important, tracking your balance can help you avoid the possibility of having an overdraft in your account.