Although the premise of balancing a checkbook sounds easy enough, the fact is that the vast majority of Americans really don’t take the time to do it, or they do not know how to do it properly. There is a lot more than simple addition and subtraction when it comes to balancing a checkbook and if you are not careful, you can end up bouncing checks. Here are some tips that everyone needs to know about balancing their checkbooks.
1. Balance means balance –
Those statements that you get every month from the bank are not just for show. They are there to help you balance your checkbook and make sure that there are no errors. The next statement that you get, go line by line and reconcile this with your checkbook. We’ll go more into reconciliation here in a minute, but for now, let’s focus on the balance. The balance in your checkbook needs to match the balance on the bank’s statement.
If it doesn’t, you need to see where the error occurred. Many times, it may be do to a checking account fee that you forgot to deduct, or a simple subtraction or addition error. Look through the entire statement until you find where the error occurred and then make sure to note the correct balance in your checkbook.
2. Reconciliation –
We mentioned this briefly above. Reconciliation refers to the process of making sure that the entries you made in your checkbook register match the entries on the bank statement. It does take a little time, but it is well worth it. Make a checkmark next to each entry as soon as you have verified it in your register. Keep track of any wrong amounts and watch out for fees that you may have forgotten to deduct.
If you have a debit card from your bank, there may be extra fees that will apply each time you use it. If you are not marking down these fees, it is all too easy to end up short in your checkbook. Make note of all of these fees and in the future, write them down in your checkbook whenever you use your debit card.
3. Handling errors –
Sometimes banks do make mistakes, but if you are not balancing your checkbook every month, you may not notice them. You may not also notice an error you’ve made until it is too late. Balancing your checkbook gives you the opportunity to find these errors and correct them before they end up costing you more money in bounced check fees.
You can look at the process of balancing your checkbook like balancing a cash register. Most businesses need to make sure that the receipts match the balance left in the register every day. Your checkbook is just like that, and being more than a few cents off is not a good idea. Schedule in a day every month to go through the process of balancing your checkbook, it will pay off.
Photo Credit: 1
Originally posted 2008-09-24 05:00:44. Republished by Blog Post Promoter
-
Budgeting While in School When you are a college student, you may think that planning out a budget is simply a waste of time, because why does a college student need a budget? No matter how young or old you are, having your own budget is vitally important, and this actually happens to be…… …
Additional comments powered by BackType