How To Balance Your Checkbook:
From Deborah Fowles
Do you balance your checkbook each month? Here are four reasons
why you should: Balancing your checkbook verifies that your
records match the bank's records. Banks CAN make mistakes, but
even more likely is that you'll make a math error in your checkbook
If you make a mistake or forget to post a transaction in your
register, you may start bouncing checks and incurring fees of
$25 or more. If there's a problem, you won't need to wade through
months of transactions to figure it out.
1. Reconcile Your Checks
Determine if there are checks that haven't cleared the bank.
Sort your cancelled checks in check number order, or use the
listing of your cleared checks in numerical order shown on your
statement. In your checkbook register, check off each cancelled
check returned to you or each check that appears on the check
listing, making sure the amount you recorded is the amount the
2. Reconcile Your Deposits
Make sure each deposit shown on your bank statement is recorded
in your check register (especially if you have direct deposit,
which you can easily forget to record). Also, go through your
deposit slips, paycheck stubs, etc., and make sure the bank
statement shows all the deposits you made. Check off the deposits
in your check register as you did for checks.
3. Reconcile Your ATM Withdrawals and Debit Card Purchases
Go through the same process with your ATM withdrawals or debit
card purchases, checking off each transaction on the bank statement
in your check register. If the bank shows transactions that
aren't included in your check register, record them now.
4. Record Interest Earned and Bank Fees
Check your bank statement for any other fees and record them
in your checkbook register. Also record any interest earned
in your checkbook register.
5. List Outstanding Checks
Now go through your checkbook register and in column two of
the balancing form list your outstanding checks (the checks
that you did not check off in your check register as having
cleared the bank), as well as any outstanding debit purchases
or ATM withdrawals that have not yet cleared the bank. Total
the column of outstanding checks, debits, and ATM withdrawals.
6. List Outstanding Deposits
Go through your checkbook register and in column one of the
balancing form list the outstanding deposits (the deposits that
you did not check off in your check register as having cleared
the bank). Total the column of outstanding deposits.
7. Record Your Bank's Ending Balance
On line one of the bottom section of the Checkbook Balancing
Form, enter the ending balance shown on your bank statement.
8. Enter Outstanding Deposits
On line two of the bottom section of the Checkbook Balancing
Form, enter the total outstanding deposits from column one.
9. Enter Outstanding Checks
On line three of the bottom section of the Checkbook Balancing
Form, enter the total outstanding checks from column two.
10. Calculate Your Balance
Use a calculator to total lines one through three, as indicated
by the plus and minus signs on the form, and enter the new total
on line four. This should equal the balance shown in your checkbook
register. If it doesn't, check for math errors in your checkbook
register, such as reversed numbers (e.g., $53 instead of $35),
subtracting a deposit instead of adding it, adding a check written
instead of subtracting it, automatic payments that you forgot
to record, etc.