How to Balance Checks

Balancing checks helps you avoid bank fees.

Keeping track of checks you write is a mundane but important part of your financial life. You won't win any prizes or popularity contests for doing it well, but mastering the skill helps you avoid costly bad check fees and overdrafts. Most banks give out check registers free of charge, and the process should not take more than an hour a month. You'll find that properly balancing checks pays for itself.

Things You'll Need

• Check register
• Bank statement
• Calculator

Instructions

Balancing Checks

1. 

   Keeping good records makes your task easier.

   Carry your checkbook in your wallet or purse at all times. Write down the check amount, date, payee and the new account balance each time you write a check.

2. Write down the amount and date in your check register each time you deposit a check into your bank account. Highlight deposits in your check register to easily separate them from outgoing checks.

3. Add together the total of debits and credits at the end of each month. Compare these totals to what's listed on your bank account statement for the same period. The Money Instructor suggests you fill in all missing transactions in your checkbook register, place a check mark next to those that credited to your account and list uncredited transactions on a separate reconciliation form. Total the uncredited debits and credits and add that amount to the balance on your bank statement. If the balance does not equal the balance in your check register, you know you have made an error.

4. Compare every deposit and debit in your checkbook to your bank statement if there is a difference between the two. Add or update missing or incorrect entries in your checkbook if necessary. In its guide for avoiding overdrafts and bounced checks, the Federal Reserve Board suggests paying special attention to overlooked debit card transactions and automatic monthly payments. Adjust the balance in your checkbook to the correct amount.

Tips & Warnings

• Use a debit card register if you use one of these cards for purchases.

• Request check imaging in your bank statements to make it easier to track checks you've written.

References

• Federal Reserve Board: Protecting Yourself From Overdraft and Bounced Check Fees
• Money Instructor: Checkbook Balancing Lessons
• Money Instructor: Checkbook Reconciliation Form