How to Balance a Checkbook

Balancing a checkbook is an important part of maintaining good personal finances. Timing is the most important factor when you balance a checkbook because bank statements often have a lapse in time from when the transactions occur to when you receive the statement. Therefore, you need to keep an accurate account of every transaction you make with your checkbook and later reconcile them.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Bank statements
• Access to your online banking information
• Checkbook

1. Gather the bank statements you have received. Nowadays you can reconcile your checkbook by using the online access to your account. The goal is to gather the transactions the bank has processed to this point and to get a statement balance, which is simply the ending balance the bank has right now.
2. Write down this ending balance on a piece of paper. Then look at your checkbook and mark off any of the checks or other debits the bank has debited from your account that are on the statement or on your online registry. The checks that have not been debited (or cleared) your account will need to be subtracted from the ending statement balance.
3. Take note of this new balance (ending balance minus any outstanding checks the bank has not cleared.) Then look for credits the bank has cleared and posted to your account, checking those off in your checkbook register. If there are additional credits that have not been cleared by the bank yet, add them to this ending balance.
4. Subtract any fees or additional transactions you don't have written down in your checkbook register that appear in the bank statement or online statement from the current ending balance (at this point this should be the statement balance minus all outstanding debits, plus any outstanding credits.)
5. Match this balance to the one in your checkbook. If they don't match, go back and see where the errors are. Report any errors on the bank's side to them, and reconcile your checkbook for any errors or forgotten items on your checkbook.

Tips & Warnings

• Many of the bank statements that come in the mail will have a checking account reconciling form on the back of them, which can help make the process simpler.