Best Practices For Checkbook Balancing

By Rita R. Robison. May 7th 2016

The weak economy has many consumers running razor thin margins on their checking accounts which forces them to keep close tabs on their spending to avoid negative balances and overdraft fees.

Rare is the person who enjoys balancing their checkbook every month. And many choose to skip the task all together.

There's no advice to help make it more fun, but knowing the best practices to balance your checkbook can make it simpler and give you greater piece of mind about your finances.

Balance Regularly

The key to balancing a checkbook is doing it regularly--once a month or more frequently. Keeping tabs on your spending will ensure you aren't spending more than you have available. If you're trying to stick to a personal spending plan, regularly checking your spending can help you stay focused on your finances and on target.

Reviewing your checks also helps you be certain no errors have occurred. If you write a check for $20, it’s possible the bank could enter it as $200. When you balance your checkbook, you’ll be able to spot any mistakes.

And, with many people concerned about identity theft, frequently reviewing your account activity will help you spot irregularities that might indicate your account security has been breached. If you see amounts withdrawn from your account that you didn’t authorize, contact your financial institution and police department immediately. See the Federal Trade Commission’s publication, Fighting Back Against Identity Theft, for additional guidance.

If you're looking for a good time to sit down and balance your checkbook, try tackling the task after you’ve received your bank statement. It will have a form on the back to help you reconcile your bank account with your checkbook.

Balancing a checkbook at least monthly is recommended. However, it’s also a good idea to check your balance if you plan to make a large purchase and you’re not certain you have enough money in your bank account.

Most banks offer consumers access to their bank account online. With this information, you can look at your bank account throughout the month and balance it at any time.

Follow This Step By Step Process

  1. Make sure that throughout the month you record every check and deposit in your checkbook registry that’s provided in your box of checks. If another member of your household also writes checks out of the account, be sure to also record them in the registry for the month covered by the bank statement.
  2. Find your balance on the bank statement and enter it on the form.
  3. Look at each check that has been cleared by the bank and locate it in your check register. Place a check mark in the registry after each check that has cleared.
  4. Do the same for the deposits.
  5. Add any deposits you’ve made that don’t appear on the bank statement.
  6. Subtract any outstanding checks from this amount.
  7. Note any service charges or other bank charges that have been made and subtract them from the total.

The amount of the total should match the balance in your checkbook. If not, check for errors.

ATMs And Debit Cards

If you use a debit card or make ATM withdrawals regularly, be sure to record the amount of each charge and withdrawal in your check registry. Also be aware of when automatic payments--such as the mortgage or utility bill--are withdrawn from your account so they can be included in your check registry. Remember to add direct deposits to your registry.

Know What Your Bank Charges For Overdraft Fees

According to a survey by the Consumer Federation of America, the median overdraft fee is $35 per incident. Overdrawing on your account can quickly add up if you are not tracking your spending and account balance.

In addition, it’s important to know the method the bank uses to process your checks. Some banks change the order of the checks and process the largest amounts first. That way, your bank account balance will drop faster and you will incur charges each time smaller checks bounce.

If your bank’s fees are in the high range and/or it rearranges the order of your checks to charge you more, you may want to consider transferring your funds to a bank or a credit union with a more forgiving policy.

It’s also important to be aware of new rules on overdraft fees that require banks and other financial institutions to get your permission to charge them. See the Federal Reserve Board’s New Overdraft Rules for Debit and ATM Cards for details.

Use A Computer To Help You

Using a computer program takes time for you to enter the data, but it will reduce the chance of errors and inaccurate numbers. Here are some programs that can help you balance your checkbook:

  • Quicken is available in Starter, Deluxe and Premium versions for $60 to $90. All contain checkbook organization tools.
  • Moneydance allows you to manage online banking and bill paying in addition to checkbook management. The cost is $39.99.
  • Clear Checkbook offers the option of using your computer or a mobile device such as an iPhone or iPad to track your budget and spending, log payments and write checks. Clear Checkbook is free.
  • Money Plus Sunset is a Microsoft product for checkbook management. It is available as a free download.

Few consumers enjoy balancing their checkbook every month, but it will give you piece of mind. It will assure you that you’re on top of your finances and it can save you from unnecessary financial hardship. Establishing a regular habit will serve you well.


Federal Trade Commission

Consumer Federation Of America

Federal Reserve Board

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