How to Balance a Checkbook

How to Balance a Checkbook

Here is how to balance your checkbook against your monthly bank statement. Different banks have different systems for you to keep such records, but all checkbooks have some kind of stub or ledger for recording each check. Fill out the information immediately when you write the check. Don’t let it go until later in the day, or the week. Don’t scribble the amount on a slip of paper with the idea of noting it later on. You will find the habit of recording your check when it is written of top importance in keeping sound financial records.

Keep your checkbooks in balance as you go along. That way you will never write checks for money you don’t have. Simply deduct the amount of money on the check you have written from the remaining balance. To reconcile your checkbook balance with the statement from the bank:

1. When you get the bank statement, take out the canceled checks (if they are provided) and put them in order by number, or date. Go through your checkbook stubs and put a mark on each stub for which you now have a canceled check. If checks are not provided, mark off check stubs for the checks that have been posted on the statement.

2. Go back through your checkbook and write down amounts of all outstanding checks – those not yet paid by the bank. Next, put down the amounts deposited, which have not been recorded on the statement.

3. Write down the service charges made against your account. Now, you are ready to reconcile the checkbook with the bank statement as done in the following example:

1. Checkbook balance $500
2. Minus service charges on bank statement $2
3. Your new checkbook balance $498
4. Bank-statement balance $320
5. Subtract amount of checks written but as yet not paid by bank $15
6. New bank statement balance $305
7. Add deposits not recorded on bank statement $193
8. Revised bank statement $498

The answer appearing at item 8 – your revised bank statement balance – should agree to the penny with item 3. What do you do if your balances don’t match?

1. Have you double-checked all addition and subtraction in your checkbook?

2. Have you carried forward any outstanding checks from your previous statement that are still outstanding? If you have any, they must be added to your outstanding checks total.

3. Have you compared the amounts on your checks with the amounts listed on the stubs in your checkbook? You may have transposed totals in your checkbook.

4. Have you carried forward the correct balance from page to page in your checkbook?

5. Did you write a check and forget to enter it in your checkbook?

If you still cannot find the mistake in balancing your checkbook, take your checkbook, together with your statement and canceled checks, to your bank and ask one of the bank officers to help you. Unless there is something unusually wrong with your account, there is no charge for this service. Go as soon as possible after you have received your statement.