If the words “balance your checkbook” make you cringe or you’re never quite sure how much cash you have in your account because you’ve been putting off the inevitable, the few minutes you spend putting your account in order will bring you peace of mind and help avoid costly future mistakes (you can be charged as much as $45 for a “bounced” check).
Balancng your checking account is really quite easy. Just use the form printed on your bank statement and follow these three simple steps.
* Bring your check register up to date
* Bring your bank statement up to date
* Compare your register with your statement
BRING YOUR CHECK REGISTER UP TO DATE
Scan your account statement for any transactions that aren’t in your check register. ATM withdrawals and check card transactions are the easiest to miss, so look for these first. If you have automatic deposits or bills that your bank pays each month enter these next. Look for missing check numbers and enter these.
BRING YOUR BANK STATEMENT UP TO DATE
Look through your check register for deposits you’ve made since the bank statement date, enter these in the space provided on the bank statement and total them. Next, enter your outstanding checks and other withdrawals (ATM or check card) in the space provided and total these.
Add the figure for total deposits to the closing balance shown on the statement, then subtract the total for your outstanding checks and other withdrawals to get the adjusted balance.
COMPARE YOUR REGISTER WITH YOUR STATEMENT
If the adjusted statement balance agrees with your checkbook balance, you’re home free (at least until next month). If the numbers don’t match, go back over your checkbook entries first. Compare each entry with the corresponding transaction from the bank statement. It’s all too easy to transpose a number, so review each amount carefully. As you go through each entry in your register, double check the running balance and correct any errors you find.
There are times when the smallest math mistake can drive you crazy. Keeping an accurate, timely check register is your best defense against checkbook balancing pain. The tedium of maintaining a manual check register is the best argument I can think of for turning the task over to your computer. I haven’t used a manual check register in over 20 years.
COMPUTERS DO IT BETTER AND FASTER
You won’t need expensive personal finance software, but if you do use MS Money or Quicken, it’s a simple matter to download and synchronize transactions from your bank. Balancing your electronic checkbook is a snap.
You could sign up for online banking instead. You’ll always have an accurate picture that you can access 24/7 from any secure computer. You can even dispense with checks and pay most of your bills (tax payments are the exception) with electronic bill pay. Who needs paper checks and mailing expenses anyway?