Considering that the average overdraft fee is around $35, it is better off avoided as much as possible. Writing down transactions in a checkbook register is one way to keep track of them, but there are also options for balancing your checkbook digitally. If your check register and bank statement don’t balance, double-check your math to see if there are any adding or subtracting errors on your register. Balancing your checkbook might feel like an archaic practice since the use of paper checks is falling out of style, but it still serves a purpose. The practice is a way to get a solid handle on how much money is going in and out of your account each month, which can help you identify fraud and keep tabs on how much money you have.
Reasons your checkbook might not balance and what to do
Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That’s why we provide features like your Approval escrow agreements in merger and acquisition transactions Odds and savings estimates. Balancing a checkbook can be a helpful way to view your spending each month and to review your checks for any errors. Checkbooks come with a carbon copy, which is paper behind your check that leaves behind a copy of what you write on it.
You or Your Bank Makes a Mistake
Now you’ll be able to compare your check register to your bank statement. The total from your calculations should come out to your current bank statement for the month. All information, including https://www.kelleysbookkeeping.com/who-issues-a-bill-of-lading-here-are-the-responsible-parties/ 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.
What Is Balancing Your Checkbook?
Next, make a note of unusual transactions and missing deposits to investigate further. Below are some scenarios that may cause your bank balance to be off and what to do next. Starting with the first transaction you enter, subtract the amount from your available balance—in the case of a deposit, add it to the balance. It’s true that fintech can make managing your money easier but there are still very good reasons to make balancing your checkbook part of your financial routine.
How to balance your checkbook
If you find one such charge, you may need to dispute the transaction with the merchant, alert your bank to a potential issue, and even freeze your account and/or debit card until it’s resolved. Many of us use automatic payments to take care of monthly bills without the risk of missed or late payments. If you forget that an automatic payment is scheduled, though—or don’t realize how much will be taken out—you might not account for that transaction in your checkbook ledger. If you think a transaction is unauthorized or contains an error, look for instructions on your bank statement for how to get it corrected.
To reconcile your transactions, go through your bank statement line by line. You’re looking to match up the “cleared” charges that are on your bank statement (meaning charges that hit your account and have been paid) with charges that you’ve listed in your register. Even if your transactions are mostly digital, balancing your checkbook is a good idea because it can help you avoid overdrafting your account, paying erroneous charges or even becoming a victim of fraud. If you’re not using your checkbook, go through your checkbook and add up all your bill payments for the month.
There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. The information presented here is created independently from the TIME editorial staff. If that still doesn’t work, try having a trusted friend or family member look over your numbers for you. Many nonprofits and community organizations also offer free financial coaching and mentoring, which can be another handy option as well.
- Your bank account balance at month’s end may end up being lower than expected if someone is making unauthorized purchases.
- If the ending balance there matches what you have in your checkbook, once all deposits and withdrawals have been factored in, then your checkbook is balanced.
- That Gomez, Gomez recommends reviewing your spending consistently through a spreadsheet or budgeting app, even if you don’t write physical checks.
But even with access to digital tools, balancing your checkbook monthly will help you ensure that your spending records align with your bank’s. 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.
Once you add back withdrawals or subtract deposits, your current balance and statement balance should be the same. The term “balancing your checkbook” sounds like it might only mean tracking check payments, but it involves tracking every bank transaction and double-checking them against your monthly bank statement. Once you’ve decided how to log transactions, put your starting bank account balance at the top right of your table. If you pull your balance from an online banking dashboard, use your “available balance” because this figure should include pending transactions.
That Gomez, Gomez recommends reviewing your spending consistently through a spreadsheet or budgeting app, even if you don’t write physical checks. 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. You can also check your carbon copy checks to ensure you didn’t write the wrong number down on your bank register. If you regularly use checks, you should try to balance your checkbook each month as soon as you receive your bank statement.
The key to this approach is making sure that you enter new credits and debits in a timely manner. Otherwise, you might forget about a transaction, which would result in an incorrect balance. Of course, some people prefer to just log in to their bank’s mobile app and view their current balance.
Budgeting apps, such as You Need a Budget or Mint, let you download your account transactions and view your register on your mobile device — and they can help you track expenses. Reviewing your account activity online can help you catch any errors and keep an eye on your finances. You can also sign up to receive alerts when your account balance falls below a designated amount. However, https://www.kelleysbookkeeping.com/ even though the paper-and-pencil aspect of checkbook balancing has mostly gone the way of the dodo, the process is still a necessary part of maintaining your checking account. But whether you were a master checkbook balancer in the time of paper or are a digital native who didn’t realize paper statements were once a thing, you may not know exactly how to reconcile your accounts.