How to Balance a Checkbook

Video Transcript

"Hi! This is Summer on behalf of expertvillage.com in this clip we’re going to be going over the importance of balancing your checkbook. One of the most important reasons why you want to balance your checkbook is to avoid paying fees to the bank or credit union. Pretty much every financial institution is going to charge you for NSF, what an NSF stands for is non sufficient funds, this means you wrote a check off of your checking account and you did not have funds in your checking account to cover that check, for example say you had a balance of $100 in your checking account and you wrote a check for $200, well since there’s only a $100 in your checking account that check would be returned to the financial institution that it was deposited at and you would be charged an NSF fee. Besides being charged the NSF fee which can be anywhere between 20 and $45 standard, the person that you wrote the check to is probably going to charge you a fee as well because their financial institution is going to charge them a fee for having that item return. So basically keeping your checkbook in balance, making sure there’s no discrepancies is going to save you money so that you’re not paying these fees to a bank. Second fee you can get on an account would be a negative balance fee, for example some banks will pay that $200 check and just take your account negative $100 so everyday your account is negative you’re going to be charged the daily fee by that bank, this fee can be anywhere between 2 and $10 pretty standard amongst financial institutions. Another important reason to balance your checkbook is so that basically the bank or somebody is else isn’t charging things to your account that aren’t yours, for example if somebody gets a hold of your checks or they get a hold of your account number or they get a hold of your debit card they could be charging things to your account that you don’t know about unless you regularly balance your checkbook to make sure that all those transactions are yours. You also want to make sure that the bank isn’t charging you any fees or any other types of debits aren’t showing up that aren’t yours that were charged by the bank that you really don’t owe and basically those are a couple of reasons why it’s very important to balance your checkbook and you don’t want to wait too long to do it, that’s why I recommend doing it at least once a month to make sure that everything’s in balance and that you’re not being charge something that you don’t owe."