How to Balance a Checkbook: Simple Step-By-Step Guide

How to Balance a Checkbook
One of the first money lessons my Dad taught me was how to balance my checkbook (i.e. check register). This is definitely one of those skills everyone should have, regardless of the fact that many of us don’t write more than one check each month.

What Does it Mean to Balance a Checkbook?

When you balance a checkbook, what you are doing is reconciling the balance that you have in your checkbook with the bank’s balance.

If your latest statement with the bank says that you have $1,000 in your account, and your running checkbook says that you have $1,100, then you need to reconcile the two amounts and determine what’s causing the difference.

Balancing your checkbook helps you achieve three goals:

  • identify the bank’s errors,
  • identify your errors (more likely), and
  • it tells you your true balance

…so that you don’t write a check for more than you have in your account.

Is Balancing a Checkbook Still Necessary?

Today, however, we can understand our money situation in easier ways: by logging on to our bank’s online account access page, by viewing our bank’s mobile phone app, or by seeing all of our accounts at one time using a service like Empower.

Since we don’t write as many checks these days, there isn’t much of a worry that we’ll not have enough money to cover a check that’s still out there.

I would argue that we can achieve the three goals above using a simpler method.

First, you can simply keep a sizable cushion in your checking account so that you’ll never have to worry about an overdraft.

Next, you can simply keep your debit card receipts and deposit receipts and periodically check them against your bank records using your online account access.

But I’m not here to explain why this isn’t a good idea. Everyone should be able to perform this simple financial exercise. Here’s how to balance a checkbook…

Get Ready: Preparing Your Checkbook Register

It goes without saying that to balance your checkbook, you need to have a checkbook register with a running balance.

If you aren’t doing this, and you want to be able to balance your checkbook at the end of the month, then you need to start keeping track.

Checkbook Register

If you didn’t keep track, but you have all of your debit card receipts, deposit receipts, and carbon copies of your checks, then you can play catch-up and get your checkbook register up to speed.

Simply take the ending balance from last month’s bank statement and jot it down as the beginning balance on your register.

Now take those receipts and carbon copies and make a note of each transaction. Total it up and you now have a checkbook balance.

How to Balance Your Checkbook

Okay, now that we have a completed checkbook to work with, break out your latest checking account statement, and let’s reconcile the two.

Remember, this is all you are doing: accounting for the differences between your checkbook (i.e. your own record) and the bank statement (i.e. their record).

Step One: Record Transactions from Your Bank Statement

The first step is to record all of the transactions from the bank statement.

Place a checkmark next to all of the items in your register that are on your statement. Make note of the correct dollar amount.

If there are items on your statement (checks, deposits, ATM withdrawals, and debit card purchases) that you neglected to write in your register, then do so now.

Your register should now be up-to-date with all of the items that your bank is aware of.

Step Two: Note What the Bank Doesn’t Know

The second step is to determine what your bank doesn’t know. Take a blank sheet of lined paper and write down your bank statement ending balance.

Next, list out all of the checks, deposits, and other transactions that are on your checkbook register, but not on the bank statement. This should be all items you didn’t place a check next to in step one.

Subtracting the checks and adding the deposits should give you a new balance, equaling the balance in your register. That’s it! You’re done.

If there is still a difference, go back and double-check your math. If your difference is divisible by nine (e.g. $118.80), you will likely have transposed a number (e.g. 35 instead of 53).

Tips for Maintaining a Balanced Checkbook

  1. All transactions should be recorded in your checkbook as soon as they occur. This will help you in keeping track of your spending and avoid blunders.
  2. At least once a month, reconcile your checkbook and bank statement. This will assist you in identifying any inaccuracies or discrepancies in your records.
  3. Make a note in your checkbook of any automatic payments or transfers. If you’re not vigilant, you could easily overlook these transactions.
  4. Consider adopting personal finance tools or applications to assist you in managing your money. These tools help you keep track of your expenses and remain on top of your finances.

Common Mistakes to Avoid When Balancing Your Checkbook

  • Not recording transactions: It’s important to keep track of each and every transaction in your checkbook as you go. This will definitely help you keep track of your expenditures and avoid mistakes.
  • Not reconciling regularly: At least once a month, compare your checkbook to your bank statement. This will detect any errors or anomalies in your records.
  • Not keeping track of outstanding checks: Don’t forget to keep track of any checks you’ve written that haven’t yet cleared. Otherwise, you risk overspending and receiving a bounced check.
  • Not updating your balance: Also, remember to update your balance after each transaction. If you neglect this step, you risk making mistakes and messing up your checkbook.
  • Not double-checking your math: Also, double-check your math. It’s easy to make mistakes with numbers, so take a moment to double-check that everything adds up.

Welp, that’s it! Keeping track of your expenditures with a checkbook can be a useful tool, and it’s not difficult to learn.

Just remember to maintain track of every transaction, reconcile your bank statement on a regular basis, keep track of outstanding checks, update your balance, and double-check your calculations.

You’ll be a checkbook balancing pro in no time if you follow these tips!

Can you balance a checkbook? How are you balancing your checkbook in this age of debit cards, credit cards, and mobile payments?

Photo by Betsssssy

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  1. Avatar Investing says:

    I had a super high amount of money in my account yes I did spend money here and there but goin from thousands to hundreds in 3 months ??? Makes it hard to believe but what makes it even harder is the savings and checking account please help

  2. Avatar Greg Bateman says:

    Sounds incredibly time consuming but as you say quite necessary. I used to do something like this but so many outgoings that I think I would lose the will to live!

  3. Avatar Glen Craig says:

    The dividing by 9 rule is magic! I don’t know how many times I was balancing some report at work, then remembered the 9 rule and was able to find my mistake.

    Technology makes things easier for us but in many cases, like balancing a checkbook, we should still understand why something works.

  4. Whatever way you use, it is good to keep track of your payments. We use online banking for the most part now.

  5. Avatar 20 and Engaged says:

    I learned how to balance a checkbook in high school, then online banking got popular, and now I just monitor statements, and transfer budgets over to Google Docs.

  6. Very valuable post; Everyone Should Know How to Balance a Checkbook, however, no one has the time or why reconcile or even attempt to reconcile when you have online banking, right? You could just review your bank account online each day to see what’s up or you could just set your phone to beep on a low balance, right? Simple enough in this fast pace, real time world we have. Nevertheless, your explanation of “how” to reconcile is very valuable to someone who wants to know how to perform the process each month or week or daily for that matter. But who wants to, or why should they want to? What’s the real benefit of the effort, other than just knowing they are spot on reconciled with the bank? Well, let me see….

    • I tend to “spend less” if I keep a register and record all expenditures. This gives me a mental view of the dollar amount I’m spending and my balance remaining.
    • Banks love it when we don’t reconcile or just peek online to see what balance we have in our accounts. But with reconciling, you will catch any fees or charges the bank has charged your account, giving you chance to dispute the amount without the passing of days, weeks, months, years.
    • Discipline. I certainly don’t want to waste time by reconciling. But I find the discipline of reconciling helps keep me on track with my financial budget and regular savings regiment. It keeps me focused on what I’ve spent, the balance I have remaining and the expenses I know I have upcoming.
    • Financial control. I’m in control of my spending. It’s the same with my diet, I tend to eat less and stay in control if I just wright down what I eat each day. It works.
    • Although the reconciliation effort may seem more of a chore than the value of “finding that penny”, I have found the additional values of budget and spending disciple have helped me stay on tract. To me it’s very much worth the effort.

      Additional tip; sometimes that penny is the result of the bank clearing an amount more or less than your hand written check amount. The bank’s coded amount is usually on the cleared check in the lower right hand corner.

      Thanks PT, keep up the great work.

    1. Avatar Philip Taylor says:

      Comment of the year! Well done.

      You laid out the benefits to reconciling and tracking your expenses quite well. I certainly agree that consciousness through this exercise brings in more control.

      Nice tips about the check. I didn’t know you could look for the clearing amount like that.

  7. Avatar Jenna, Adaptu Community Manager says:

    Thanks for mentioning Adaptu!

  8. Avatar Jon - Free Money Wisdom says:

    Praise the Lord for internet banking. I grew up in the days before internet banking as well, but thankfully the burden of manually balancing a checkbook is long gone. Although, I do know some stalwart people who swear by this method above all others. Personally, I like to keep receipts and follow the same simple guidelines as “optionsdude.” 🙂

  9. Avatar optionsdude says:

    Yes, I know how to balance a checkbook since I grew up before the era of internet banking. I also know how to diagram sentences. Both are probably useful skills to know but not something that would be all that useful for everyday life. I haven’t balanced my checkbook in 5 or 6 years since I really got into online banking. I remember spending hours at my desk looking for the reason I was off by 1 or 2 cents. What a waste of time! I finally got to the point where I would just reconcile that penny or two and say screw it. Now I simply make sure that the expenses I actually pay out of the checkbook are what they should be. If so, all is cool.

    Plus, I get a text message if my balance falls below a certain level and can make the appropriate adjustments. This older dog can learn a thing or two.

    1. Avatar Philip Taylor says:

      Ha! Great point about diagramming sentences. The underlying concept is valuable, but the application has lost some practicality.

      Nice tip about setting up a text alert for low balance.

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