Let’s be frank - you probably know that you’re supposed to balance your checkbook but you most likely never do it. There are millions of Americans who don’t balance their checkbooks and don’t even know how often or why they are supposed to do it. We’re here to help you understand why you need to balance your checkbook, how often you’re supposed to do it and, finally, how to balance a checkbook.
Why do I need to balance my checkbook?
Believe it or not, you absolutely need to balance your checkbook even if you don’t write any checks! You may think that balancing a checkbook is a thing of the past since you have access to internet and mobile banking literally at the tips of your fingers, but even today there are still lots of reasons to balance your checkbook regularly.
First of all, balancing a checkbook can help protect you against financial fraud since often times identity thieves will make a very small withdrawal from your bank account and watch if you notice. If you don’t, they will start making larger withdrawals, potentially causing you to love thousands of dollars. Secondly, balancing a checkbook can help you double check your bank to make sure that there hasn’t been any mistake when depositing or withdrawing funds. Surely, bank mistakes are rare, but they do happen and usually, you only have 60 days to report them, so if you don’t catch the mistake in time, you might lose a large amount of money. Additionally, if you forget about the checks you wrote or transactions you’ve made, you can risk having your account going into overdraft, which means you can end up owing the bank money. Plus, balanking a checkbook every week or so is significnatly easier than doing it every few months.
How do I balance my checkbook?
Balancing a checkbook is very easy and you only need to do it a few times to get the hang of it! Here’s how you can balance you checkbook in a few easy steps. First of all, use your online banking app to find out your checking account balance and record it in your checkbook. Next, write down any pending transactions and record the sums of the checks that you’ve written that haven’t been cleared yet. In addition to the amounts, you should record the date of each transaction, its description and the check number if applicable. Then start recording all the transactions that happened since your last bank statement starting with the first one. Once you enter a transaction, either subtract or add the amount to the balance on the statement and record the new number. Once you’ve recorded all the transactions, compare the resulting number to your current available balance. If they match - great, you’re done! If not, you need to go back and find the mistake.
How often should I balance my checkbook?
Most people who actually balance their checkbooks regularly do it once a month, which is totally acceptable, but if you really want to stay on top of your finances, try balancing your checkbook every week - this way it takes up a lot less time and it’s much easier to sport mistakes.