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. At the end of the statement period, use your check register to match the balance and each transaction to your bank statement. If your balance and transactions match up, your work is done, and you can start logging transactions for the next month. If there’s a mismatch, it may take some work to figure out what the cause is.
Step 6: Check for Previous Months’ Outstanding Items
Transactions that are listed in your checkbook register may not show up on your account statement if they’re still marked as pending with the bank. 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. Good old-fashioned Microsoft Excel or paper and pen could be enough to help you keep track of where your hard-earned money is going so you can make sure it’s being spent in the right place. This is one area where digital tools have a big advantage over the pen-and-paper method. You’ll need to be pretty good at math on the fly or use a calculator if you prefer the checkbook register method. Each time you enter in a new transaction, make sure to update your balance.
Is Balancing a Checkbook Necessary?
If you don’t regularly write checks, balancing a checkbook may not be necessary. That Gomez, Gomez recommends reviewing your spending consistently through a spreadsheet or budgeting app, even if you don’t write physical checks. Unfortunately, the basic money management task of balancing our checkbooks is not taught in most schools and usually not taught by our parents. In this case, compare all your canceled checks and receipts to your check register to find the transposed number. As with your outstanding payments, there may be a space on the back of your monthly statement to note these outstanding debits.
Step 5: Verify All Check Payments
These apps link to your checking and other financial accounts (including credit cards and savings accounts) and automatically record new transactions for you. If you want to match your current account balance to the balance showing on your bank statement, you can do that by factoring in transactions posted after the statement date. Once ordinary annuity definition you add back withdrawals or subtract deposits, your current balance and statement balance should be the same. A paper check register is still one of the simplest ways to balance your checkbook. These little booklets are usually included when you order paper checks and offer you a quick way to record transactions no matter where you are.
- If you don’t have a check register, you could download a free check register template online or create one that works for you with an app or notebook.
- Log this amount at the top of your checkbook register in the space indicated.
- Banks may hold checks to verify funds or bounce a check entirely if the check writer’s account has insufficient funds.
- If it goes unnoticed, they may try to dip into your account for a larger amount.
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.
It’s a good idea to set aside a certain time at least once a month as you get started. If all else fails, you can also ask for checkbook balancing help from a bank teller at your local branch. 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. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.
Many nonprofits and community organizations also offer free financial https://www.kelleysbookkeeping.com/what-is-a-debit-and-credit-bookkeeping-basics/ coaching and mentoring, which can be another handy option as well.
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. Our partners cannot pay us to guarantee favorable reviews of their products or services. For more detail, review our guide to writing a check and entering transactions into the check register. 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.
Recheck for any uncleared transactions to clear each day and check them off as they clear. If a transaction remains uncleared for 60 days, contact the person or company you paid to sort out the issue. If the result is a standard dollar and cent number, such as 2.95 — not 2.956 — then search for that number in your checkbook register. You accidentally added it when you should have subtracted it or the other way around. Compare your statement balance to your checkbook balance and subtract the smaller one from the larger one to get the difference. If the result is a round number — no decimals — then your issue is a transposed number.
Along with allowing you to easily record lots of different types of transactions, these digital tools also can help you budget and do the math for you — things a checkbook register can’t do. To protect against losing track of your balance and getting hit with an overdraft fee, you need to balance your checkbook — sometimes called a check register. You do this by manually recording every transaction, whether it’s a debit card purchase, writing a check, an automated payment, or a deposit. When you’re checking your account statements and transaction history regularly, it’s more likely that you’ll be able to spot any suspicious transactions. For example, a small deposit of a few cents or a $1 debit transaction could be evidence of a scammer testing the waters before launching a larger-scale attack on your account. Taking time to balance your checkbook could help you avoid financial headaches caused by fraud.
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.
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. 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. Knowing how to balance your https://www.kelleysbookkeeping.com/ checkbook, even if you don’t write a lot of checks, or any at all, is an important skill to master. If you think a transaction is unauthorized or contains an error, look for instructions on your bank statement for how to get it corrected. Some of your most recent transactions might end up on your next month’s statement.
If your bank account balance doesn’t match up with the cleared charges on your checkbook register, don’t panic. First, you can lean on whichever mobile banking apps and features are offered by your financial institution. Some banks have more robust budgeting tools than others, which may make it easier to track transactions and even reconcile external accounts using the same software. Those fees can easily eat into your balance, potentially putting you in the red — and in debt to the bank.
However, this doesn’t account for pending charges, checks that haven’t been processed, etc. An up-to-date check register will always tell you exactly where you stand at any time, without surprises or needing to rely on a mobile app. Now, though, banking customers have many different options for spending money. Compare all other transactions listed in your check register to those listed on your monthly statement.
