Balance Your Checkbook Regularly

By: Martin Lukac
Submitted: 2007-01-17 16:16:08
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Do you faithfully balance your checkbook each month? How about once a week? Chances are that you don't.

But you should.

Balancing your checkbook is the starting point of managing your finances. Millions of Americans don't do it regularly. Some people don't even write down the exact change on the checks they write. Some people enter false amounts into their check register to think they have less money than they really do. Others want to hide things from their spouses. Several only balance their checkbooks once a year when they do taxes.

Okay, I skipped two months when my daughter was born. When I finally sat down to get it all balanced, it took hours. It was awful.

The most time effective way to balance your account is on a weekly basis. I fully believe that the longer you wait between balancing sessions, the more errors you will find. A checkbook that just won't add up is a nightmare that is often never figured out.

Imagine my surprise after being married for a decade to find out that my husband didn't know how to balance a checkbook. Oh- he never overdrew an account or had a problem figuring out how much money he had. He just didn't know how to sit down and add it all up on paper. When he took over the complete management of our finances, it didn't last a month. But he did learn how to balance the checkbook.

Balancing your checkbook is simply matching your records with the bank's records. You compare your register to your monthly bank statement. You can quickly do this on the computer, but remember that you are entering the numbers on your end, so mistakes can still be made. You can also do this with pen and paper, which is often preferred by a lot of people. I use a large log book that will hold almost a whole month of spending per page. I like being able to look over a long span of time at once. I use post notes to keep track of when I balance and any discrepencies.

The first step is to regularly write down all receipts. We have a basket next to where we empty our pockets every evening. It is habit to drop all receipts in the basket. When money is tight, I might balance it every other day. This is easy by checking my account via the internet. You can also call into your bank for the account history by telephone.

That doens't mean that we don't miss receipts. Sometimes we don't bring them home. If we don't, by balancing every week, we are able to catch the missing receipts before they add up to a whole lot of money.

Balancing your checking account is quite simple. Start by checking off every item in your register that has cleared the bank. Then go back and add in any items that the bank says you spent, but you didn't write down. This may be interest earned or bank fees.

Total up all of the checks and debits versus the deposits that you do not checked as cleared. This is the amount of money that you have floating around. It hasn't cleared yet, but it is already spent.

Subtract that amount from the ending balance in your register. This amount should equal the balance on your bank statement. If it doesn't check for math errors in your checkbook or the omittance of items.

Sometimes, it is impossible to reconcile your checkbook. This often happens when you let a large amount of time go by. Simply start over. Accept what the bank says your balance is and go from there. Balance your account more often, and it probably won't happen again.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

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