how to balance a check book

Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors. Her background in education allows her to make complex financial topics relatable and easily understood by the layperson. She is the author of four books, including End Financial Stress Now and The Five Years Before You Retire. Here’s what you need to know about how to balance a checkbook in a paperless world.

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how to balance a check book

There may be a space on the back of your statement to note outstanding deposits. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. If you’ve tried all these and the balances still aren’t matching up, try taking a break for a while.

SoFi Checking and Savings

To balance a checkbook, you’ll have to fill out your checkbook register routinely. When you find this number and verify the math mistake, reverse it as needed and rebalance your check register. Compare your statement balance to your checkbook balance and subtract the smaller one from the larger one to accountant partners payroll and hr software get the difference. If the result is a round number — no decimals — then your issue is a transposed number. If you find a discrepancy here, make the necessary changes and rebalance your checkbook. Balancing your checkbook in today’s digital world may seem redundant, but it’s critical for two reasons.

  1. There are plenty of robust financial apps that can help you create a ledger of transactions if you don’t want to do this task by hand—but you don’t need anything fancy to get started.
  2. Compare your statement balance to your checkbook balance and subtract the smaller one from the larger one to get the difference.
  3. If your balance and transactions match up, your work is done, and you can start logging transactions for the next month.
  4. It’s a chance to see how your money came into the account and where it went.

Log Your Beginning Balance

You accidentally added it when you should have subtracted it or the other way around. Run through your outstanding payments and debits and verify they are accurate. Maybe you missed a cleared transaction on your statement or thought you saw one clear your statement that actually hadn’t. For more detail, review our guide to writing a check and entering transactions into the check register. This interest payment is usually one of the last transactions on the statement.

How To Balance a Checkbook Using a Check Register

If you miss this transaction and fail to balance your checkbook at the end of the month, you could overdraft your bank account and end up with a large overdraft fee. Apps like Mint, Personal Capital, You Need A Budget (YNAB), and others link with your checking account and track your transactions. You often must log in and categorize these transactions, which will be the perfect time to also check these transactions off in your check register. Be careful of unfamiliar charges, such as overdraft fees, on your statement that you hadn’t noted in your register. If you still can’t balance the figures, you can ask your bank for an extensive review of your transactions — but note that it may charge an account research fee of about $25 an hour. If your bank or credit union offers online banking, you can see an up-to-date list of your transactions online.

If you no longer receive paper statements, log on to your online banking system and print out the current statement. The old-school method of checkbook balancing assumed that you would carry a paper check register with you everywhere you went, and that you would record your transactions by hand. It also assumed that your transactions consisted primarily of paper checks going into and out of your account. When you’re done reconciling your transactions, add up the cleared charges on your checkbook register or spending tracker. For example, if you have $1,000 in your checking account and spend $50 on food, you’ll adjust your balance to $950 after you enter it in your register.

If you still can’t find the problem with your checkbook being imbalanced, contact your bank for further assistance reconciling your checkbook. Perhaps there’s a discrepancy in a pending transaction or a hold on your account that you’re unaware of that’s preventing you from having a balanced checkbook. If an outstanding transaction hasn’t cleared your statement in 60 days, contact the person or company you paid to see if there is an issue. If the person or company lost or never received the check, call your bank to stop payment. 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. If you’d like the accountability of recording your own transactions but need a little more structure, you might consider using an accounting program, such as Quicken or YNAB.

The checkbook register, also known as your checkbook ledger, is a little booklet in your checkbook where you’ll record details about checks you’ve written out. Do you faithfully balance your checkbook to the penny each month? Balancing your checkbook is one of the most basic habits for good money management, yet millions of Americans don’t do it on a regular basis.

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. 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.

Compare all check payments in your check register to those on your monthly statement. Place a checkmark next to all matching check payments in your check register and bank account statement. Compare all deposits in your check register to those on your monthly statement. Put a checkmark next to all matching transactions in your check register and bank statement. Keep track of your transactions in a register — a checkbook register, a notebook or a spreadsheet on your computer can all work equally well. This list should include your purchases, withdrawals, deposits and bank charges.

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. Whatever the reason, there’s a strong case to be made for keeping an eye on what’s coming in and going out of your checking account.

If you’re having trouble balancing your checkbook, it may be because you have transactions that are unaccounted for, either on your statement or in your checkbook register. Double-checking transactions or calling the bank could help you find an overlooked credit or debit. You can also review your register for mathematical errors that would result in an incorrect balance. You may prefer using a budgeting app if you have multiple bank accounts or credit cards, as it’s easier to see them all in one place. Relying on these apps alone to balance your checkbook can be problematic, however, if you’re not keeping a close eye on each account individually. Pick a time of the day when you’re free every day and log into your online banking.

These apps link to your checking and other financial accounts (including credit cards and savings accounts) and automatically record new transactions for you. Compare all other transactions listed in your check register to those listed on your monthly statement. Such transactions include debit card purchases, automatic what is the difference between notes payable and accounts payable payments, ACHs, and ATM withdrawals. However, there are a couple of downsides to using a daily check-in as an alternative to checkbook balancing. For one, if you still use paper checks, this method does not account for them. You may overdraw your account if there is an outstanding check that you forget about.

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. Assuming all the transactions from your statement and your register match, the end balance showing for each one should also be the same.

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