The easy way to balance your checkbook

The easy way to balance your checkbook

Yes, you can balance your checkbook every month to the penny with minimal time and effort. It is very important to do so in today’s world to avoid becoming a victim of fraud and identity theft.

There are a few points to keep in mind when balancing your checkbook. First, the ending balance in your checkbook and the ending balance on your bank statement will not match due to timing. At the time you balance your checkbook, the bank statement has a due date, which is usually printed at the top of the statement. Second, the only differences that occur between your bank statement and your checkbook are deposits in transit, unrecorded deposits, outstanding checks, transfers, and adjustments. Finally, remember that the bank is always right.

When you receive your bank statement, take your checkbook register and place them next to each other. Start with the ending balance on your bank statement. Your bank statement will then list all deposits made to your account during the period you are reconciling. Compare the deposits on your bank statement with what you recorded in your checkbook register. A transit deposit is an amount that you have in your checkbook but is not listed on your bank statement because of the date of the statement. Add these amounts, if any, to the closing balance on the bank statement. An unrecorded deposit is an amount that the bank shows but is not on your checkbook’s register. Add these amounts, if any, to your checkbook register. This section is usually the easiest to balance because no magical amounts of money appear in your account. These amounts are the result of actual money you carry in the bank, deposit transfers between accounts, or payroll direct deposits.

Next, you’ll want to see what checks the bank you wrote cleared your account. They are listed on your bank statement in numerical order. Follow this order and tick next to the check listed in your check book register that has cleared the bank. Those checks in your register that do not have checks next to them, otherwise known as outstanding checks, should be removed from your bank statement balance. Be on the lookout because the check may clear for an amount other than what it was written for. Either the writing on the check was unclear or the numbers were mixed up.

Other withdrawals that may occur during the statement period are debit card purchases, automatic debit payments and ATM withdrawals. Make sure any reductions on your bank statement are entered in your check register. It is important to check this section of your bank statement and make sure it matches your checkbook as this is an area where fraud is rife. If you know where you shopped and used your debit card, or when and where you stopped and made an ATM withdrawal, then those transactions are the only ones that should appear on your bank statement. If other withdrawals appear on your statement that you cannot justify, contact your bank immediately!

There may be adjustments to your account such as interest, service fees and the occasional bank adjustment. Yes, I realize I said the bank is always right. Well, it is. Every bank employee who comes into contact with money has to balance at the end of the day. Trust me, they will find their fault. And they often find your mistakes too! Don’t forget to subtract your fees and add the interest to your checkbook register.

The ending balance on your statement should now match the ending balance on your checkbook register. If the amounts aren’t the same, I find it’s usually in the draws. Specifically, review cleared checks and the amounts for which they cleared.

You work hard for your money! By following these simple guidelines, you can have less frustration and a better understanding of where that money is going, and you can protect yourself from the many instances of fraud in today’s society.

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