How to Balance your Checkbook

Of all the things in the world, I wish my checkbook could balance itself. Unfortunately, if I do not put in the effort to balance the thing, it will get so far off that it must be abandoned in favor of a new checking account. Your checkbook really needs to be balanced at least monthly. Even if you carry a substantial balance that you never touch, it pays to keep it right.

The best time to balance your checkbook is when your monthly statement arrives. When you get your statement, it is better to balance the checkbook as soon as possible. This way, you can insure that if there is a problem you will be able to correct it before it creates difficulty for you.

Begin balancing your checkbook by marking the checks that have cleared your account. Next, make sure of which deposits have been credited and are reflected on the statement. Draw a line under the last item in your checkbook that either cleared or was credited to your account on the statement. This is the point that you will be able to balance your checkbook to your bank statement.

The next step is to turn you statement over and record all of the outstanding checks recorded in your register but not listed on the statement. Add them up. Take that number and subtract it from the balance showing by the underlined item in your check register. If all is right with the world, this should be the amount of your statement balance.

If not, look and see if any of your check amounts differ from the statement amounts. Do the same for your deposits. If everything matches there, you need to go back and begin to check out the subtraction and addition on your check register. This should yield differences in one or more places caused by math errors. Add or subtract these amounts to make your register total accurate.

Now, use this new number and subtract your outstanding check balance from this new balance. This should bring into line with your bank statement balance. If you are still off, double check the beginning balance with the beginning statement balance. If these match, you have either failed to record a check or deposit, or you still have more math corrections to make. Keep repeating these steps until you are in balance.