Some banks still mail out monthly bank statements around the end of the month, but many have switched to online statements only. If you no longer receive paper statements, log on to your online banking system and print out the current statement. Reconcile it against the information that’s listed in your check register. This simply means going through your statement and your checkbook register line by line and matching up transactions. When you’re done reconciling your transactions, add up the cleared charges on your checkbook register or spending tracker. To “balance a checkbook” — in its literal and maybe old-fashioned sense — means going through your bank statement and checking each transaction against what you’ve recorded in your check register.
Why balancing your checkbook is important (yes, even if you don’t write checks)
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. 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. You needn’t be making all your transactions with paper checks in order to have a checkbook to balance.
- 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.
- 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.
- Or a bank teller types in the wrong amount when you deposit a check in person.
- Then, you’ll go through your bank statement and factor in any other transactions not listed.
- Apps like Mint, Personal Capital, You Need A Budget (YNAB), and others link with your checking account and track your transactions.
Step 3: Deduct Any Bank Fees and Add Reimbursements
To get started, you might consider methods you’re already comfortable with. If you like to use your phone for everything, it may work to use an app to check the bank account balance each day. You could also decide to set up alerts to let you know when transactions occur. If your checkbook doesn’t balance and your math isn’t https://www.bookkeeping-reviews.com/exporting-invoices-in-bulk-to-xero/ 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.
Benefits of Balancing Your Checkbook Regularly
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 online bookkeeping and accounting services register. If they have cleared in this statement, check them off on the outstanding transaction list and your current statement. This interest payment is usually one of the last transactions on the statement. Enter the amount in your check register as you would any other transaction.
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. Or you can keep receipts and then enter them all in when you get home, or at the end of the day. Remember to enter in every transaction that’ll go through your bank account, including ATM withdrawals, automatic payments and online purchases.
Pick a time of the day when you’re free every day and log into your online banking. Compare your checkbook register to the day’s transactions and check off those that show as completed in your account. Leave and uncleared transactions in your check register unchecked. With today’s smartphones, we basically carry computers everywhere we go, so checking our checking account balance is as easy as logging onto our bank’s mobile app or online banking website. Budgeting apps are another option for managing checking account activity. These apps link to your checking and other financial accounts (including credit cards and savings accounts) and automatically record new transactions for you.
Balancing a checkbook might not look the same for today’s banking customers as it did a few decades ago, but that doesn’t mean that maintaining an up-to-date account ledger isn’t still important. If you’re using the checkbook register method and comparing transactions https://www.bookkeeping-reviews.com/ 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.
If you’ve combed through your account statements and still can’t get your checkbook to balance, you should call your bank to ask about any pending debit or credit charges you may have overlooked. While some people really enjoy putting pen to paper, others fiercely prefer the convenience and ease that technology offers. If you regularly use checks, you should try to balance your checkbook each month as soon as you receive your bank statement. Now you’ll be able to compare your check register to your bank statement.
Then, set aside a little extra time every month to balance your checkbook. If you bank online, you’ll have easy access to your account and statement. As you grow comfortable balancing your checkbook, it might be easier to think ahead. Would you like a transaction to be made every month that deposits some of your income into a savings account? Compare all other transactions listed in your check register to those listed on your monthly statement.