Learn How to Balance Your Checkbook

It is surprising how many people have never learned the basic skill of “balancing” a checkbook. Nevertheless, it is an essential skill if you want to control your money, not let it control you. And the process is simple. You need to do this every time a new statement arrives, usually at the first of each month.

First, make sure all the transactions you have made are listed in your checkbook. All checks you have written, all deposits made, all bank entries like interest and services charges on your statement, and all automatic deposits or withdrawals should be included.

Next, compare your checkbook with your bank statement. Add up all charges and deposits that you have made (checks written or ATM transactions, etc.) that have not yet arrived at the bank and are not on your statement but are now in the checkbook.

Then, begin with the balance given on your bank statement. Add to this the total of your unlisted deposits not shown on the statement. Subtract from this the total of any outstanding (not shown yet) expenditures. This number should now equal the amount on your checkbook.

If the numbers do not match, then it is a matter of looking for and correcting one or more errors. Make sure all entries are the same. It is easy to leave off cents, enter a check twice, or make some other small error.

If the above is not enough information for you, check out Balancing Your Checkbook: Step-by-Step Instructions on About.com for more than you will ever want to know!

The process really isn’t too difficult. For most it is more a matter of self-dicsipline. But it is important, so do it, and do it consistently.