How to Balance your checkbook- basic beginners steps

Do you guess how much money you have in your checking account? Are you worried bill payments might bounce? Balancing your checkbook helps eliminate your worries.

Difficulty: Moderate

Instructions

Things You'll Need:

• Your checkbook register
• A list of transactions/checks written, available online from your bank or you can request a paper copy from your bank.
• A calculator
• Pen or pencil

1. The first thing you will need is a checkbook register, where you should have a list of deposits and withdrawal listed. If you are hap hazard about that, don't worry, good record keeping is going to be made simple.
   * The first thing to do once you have your register, is to obtain a list of transactions. You can request a paper copy from your bank, or go online and look at your checking account summary. Each transaction will be labeled with a + or deposit/ - or withdrawal notation. There will also be notations saying whether the check or transaction (if you used a debit card)is cleared or pending. We are not going to worry about cleared items right now.

2. 
    
   Your checkbook register will let you see exactly what you have in your account!

   *At the beginning of the register, write your current checking account balance. If you have some things that haven't cleared, don't worry, just write what your current balance is and the pending charges will be subtracted as we go.
   *Now that you have your register and your transaction list, find the earliest date of a transaction that hasn't gone through or check that hasn't cleared. For example, if it is June 3rd, and there is a check that is not cleared written on May 20th, that is where you will start, moving closer and closer to the current date.

3. 
    
   Time to do some math...

   *Subtraction! For each expense that hasn't cleared, write down the date, the check number or DC/ ATM if you didn't write an actual check, and the transaction (gas, cash, groceries, car payment, etc.).
   *Subtract the amount of each transaction from the total balance and then list your new balance.
   *Repeat this step for each withdraw until you are up to date.
   *Add in deposits as they are made and include that money in your new balance.

4. 
    
   A balanced checkbook.

   Now the part that most people fail at- keeping the checkbook in balance!
   *Every time you write a check or use your checking/debit card, write it as a withdrawal in your checkbook and subtract it from the balance.
   If you do this each time you use money from that account, you will never have to wonder if you have enough money for your purchases, because you will see your available balance.
   *Check for cleared items at least once a week. You can do this online or in person with your bank. That way you are aware of what money remains in your account in relationship to what your balance of available money is. This saves you from the pitfall of assuming you have more available than you really have.
   * Don't pretend that pending withdrawals or checks are a cushion. If your balance says $100.00 left, but you know a $50.00 payment has not cleared, don't act like you have $150.00. That is how people bounce checks!

Tips & Warnings

• Always write down a transaction immediately! If you can't do it that minute, at least do it that day!
• Check your balances and your cleared items on a weekly basis.
• Use your actual balance in your check register to determine what you buy and how much to spend.
• I am not the only resource for this information. Please check other online web sites, financial planning articles, and books for more complete information.
• If you make calculation errors as you balance your checkbook you will have a total that does not reflect your actual balance. Please double check your figures!