How to Balance your Checkbook

Pulling your hair out? Smoke coming out of your ears? It sounds simple enough but you would be surprised at how many people have trouble balancing a checkbook. This is the cause of a lot of frustrations. Balancing of checkbooks is taught in a lot of math classes, a worksheet is given with every thing on the same page, although it is quite different in reality. Even with the classroom teaching some people still pull out their hair when it comes to balancing the check book each month.

In reality, once a month a statement from the bank comes in the mail. The statement shows all the transactions that the bank has processed through the account, not all the transactions you have actually made. The statement for a checking account will also show how each transaction was made, check payment, check card, ATM, etc. Make sure that all transactions are clearly posted in the checkbook register.

It is very important to list all transactions in the checkbook register within a few hours of the transaction. I say within a few hours because some people leave the checkbook at home and carry receipts. The fewer transactions made out of a checking account during the month the easier and quicker it will be to balance at the end of the month. As a general rule the only money left in my checking account is designated for bills, cash is used for everything else. This way I do not have to worry about accidentally dipping into the bill money.

To start take the statement and the checkbook, grab a pen and a highlighter. Make sure that you are comfortable and able to concentrate. Concentration is a key factor in avoiding mistakes. Then compare the two. I use the pen to check off all matching transactions, then I take the highlighter and highlight all the accounted for transactions.

Next, turn the statement over. There is a place for listing the ending balance of the statement, the total of unaccounted for deposits, and a place to total all the outstanding debt that were paid. Take the ending statement balance add the deposits to it. Then take that balance and subtract the debts that were paid but not accounted for. This amount should agree with the ending balance in the checkbook.

Do not panic if the end result does not match. Simply take the last statement and recheck that the balances matched at that time. Do the totals match? Good, now recheck your math. Is it correct? Good. Now repeat the entire process to make sure you have not inadvertently overlooked something.

Once you calm down, you may realize it was balanced all along. With the advances in technology you bank statements can be obtained online. There are now programs that will make the necessary calculations for you. Remember if you make a mistake when entering the information then the program will have errors in the total.