Balancing your checkbook is a simple and necessary skill that can save you both time and money. If either you or your bank makes a mistake, or if unauthorized charges have been made to your account you do not balance your checkbook, such errors may go unnoticed until your account until you are overdrawn. Even if you have overdraft protection, the associated fees can add up quickly, potentially putting you into a precarious financial situation.
Step 1.Step 1. Gather your bank statement, checkbook register, and cancelled checks. Some banks send photocopied pages of cancelled checks and deposit slips instead of the actual document. Others give a listing of cancelled checks in numerical order. In any case, your checks need to be filed in numerical order. You will also need a pencil and a calculator.
Step 2.Step 2. Compare your checks or numerical listing to your checkbook, placing an “x” or check mark next to each item in the checkbook. Next, check your bank statement for non-check withdrawals such as ATM withdrawals, debit card purchases, automatic payments and bank fees, and mark them off in the checkbook. Compare your deposit slips to your checkbook, and check for automatic deposits, such as direct deposit or interest payments. The key is to make sure everything listed on the bank statement is accounted for in the checkbook.
The back of your bank statement should have a blank form that will aid you with the next three steps.
Step 3. Make a list of any remaining checks and withdrawals listed in your checkbook that do not appear on the bank statement. Add them together to get a total dollar amount. These are your outstanding withdrawals.
Step 4. Repeat step three for any deposits that do not appear on your bank statement.
Step 5. Find the closing balance listed on your bank statement and add the sum from step four to it. This will give you an adjusted balance.
Step 6. Subtract the sum from step three; the outstanding withdrawals, from the sum in step five; the adjusted balance. The answer should be identical to the balance of your checkbook register. If it is, your checkbook is balanced, and you’re done. If it isn’t, there is an error, and you need to find and correct it.
Step 7(if there are errors). First, see if the amount of the difference is divisible by nine. If so, you may have simply transposed numbers. For example, you may have written a check for $35.40 and written $35.04 in the check register, causing an error of thirty-six cents. Thirty-six is divisible by nine. You will need to see if amounts of all withdrawals and deposits written in the check register match those on the bank statement. If that isn't the problem, recheck your math to make sure you didn’t make any addition or subtraction errors. Then make sure you didn’t miss any outstanding checks or deposits. If all those steps are correct, you will need to check the math of your check register. You may have made an addition or subtraction error there.
Now that you have learned this how to balance your checkbook, the key is to stay diligent. Good luck!
