• Home
  • GET THE BOOK
  • Start Here
  • Blog
  • Free Resources
  • Shop TBM
  • Courses

The Budget Mom

Real Women. Real Life. Real Finance

  • Home
  • Products
    • Live Rich Planner
    • Budget By Paycheck
  • Blog
  • FREE RESOURCES
  • COURSES
  • GET THE BOOK
  • Shop TBM

A life you love on a budget you can afford.

Here on TBM®, I provide you with simple, easy-to-follow solutions to help you budget your money, pay off debt, save more, and crush your financial goals. But more than that, I give you the tools to start doing the things that matter most to you, on a budget that actually works!

The Right Way to Balance a Checkbook

February 28, 2017
BUDGETING

Share55
Pin681
Share
Tweet
Email
736 Shares

Balancing a checkbook might seem like a thing of the past, but it's one of the most basic habits of good financial management.

Understanding how to balance a checkbook might seem really easy. It's basic subtraction and addition, right? Well, you might be surprised that 69% of people never balance a checkbook. It's even more surprising that some people don't even know how to properly write a check.

With the rise of popular online technology like Mint.com, the need to keep an actual paper register is a dying trend. Even if you bank online and have access to online tools to track spending, it's still important to balance a checkbook and keep an accurate tally of your spending.

When you write down every transaction as it occurs, you not only get an accurate rundown of your current bank account balance, but you're also more aware of where you are spending your money. Always having an updated value for your bank account balance is especially helpful when you write a check, or need to withdrawal cash. You have a quick way of knowing if you have enough money in your bank account to cover it.

  • Read: Our 2017 Budget Binder (A Plan for Every Dollar)

There are many benefits to balancing a checkbook.

  • Real time tracking of your money
  • Catching mistakes
  • Avoiding overdrafts and fees
  • Helps with budgeting
  • Supports you and your savings goals

TRACK YOUR TRANSACTIONS

One of the first steps towards good financial management is accurate record keeping. Online banking can help when it comes to checking your transaction history and knowing your current checking account balance, but keeping a hard copy of your spending and taking the time to manually track your spending is more important. I have found that when people manually track their day-to-day spending, they are surprised on where their hard earned money is actually going. Those small purchases really add up and catch people off guard.

When recording transactions in your checkbook, make sure to record EVERY transaction. This includes checks that you write, debit card purchases, cash withdrawals, automatic bill payments, etc. If regular pen and paper is too old school for you, then make sure to check out online checkbook tools such as Checkbook & Balance My Checkbook.

  • Read: Personal Budget Categories (Organizing Your Budget)

BALANCING ACCOUNTS

Balancing your checkbook is a great way to be more aware of your spending habits, but it's also a great tool to catch costly mistakes. Make sure to compare your manual checkbook with your account statements. When comparing the two, make sure that things match up. This means that what you recorded on your checkbook should match the transactions in your bank statement. If something is off, make sure to do some investigative work to figure out why they are not matching. Did you write down the wrong numbers? Did you forget to record a transaction? Maybe you missed an automatic payment? Did the bank or institution make a mistake?

When comparing my checkbook to my bank statement, I cross off things in my checkbook as I go along. It takes me about 15 minutes a month to balance my account. If you don't want to write down each transaction right away, then make sure to save your receipts throughout the day and add them to your checkbook at night.

  • Read: How to Calculate Your Net Worth

WHAT TO LOOK OUT FOR/COMMON MISTAKES

The most common mistake when filling out a checkbook is forgetting to record a transaction all-together. Life happens, we are constantly in a hurry, and sometimes we just forget. To avoid missing transactions, I recommend recording the transaction at the time it happens. If you end having surplus in your checking account at the end of the month, then forgetting to record a written check might not be that important. However, if your checking account balance is low at the end of every month, knowing the exact amount in your bank account at all times is crucial.

When comparing your checkbook to your bank statements, remember that some transactions might not show up until the next bank statement. If you made a purchase on January 31st, it might not actually show up on your bank statement until February. You will have already recorded it for the month of January in your checkbook, so this could lead to some confusion.

HOW TO BALANCE A CHECKBOOK

 

1. Find out your CURRENT balance. Log into your account online, or call your bank and find out the current balance on the account you are wanting to track. Write this balance in the box at the top of your checkbook labeled “Balance or Balance Forward.”

Keep in mind that the balance you are currently seeing does not include uncleared checks or pending payments. Make sure to keep an eye on your account in the next couple of days in case your balance changes to reflect these transactions.

2. Record ALL Transactions. Write down any debits (money going out) and credits (money coming in) to your account. There are two columns in your checkbook to record these transactions. Each column labeled appropriately.

3. Label or fill out the description for each transaction. Some people choose to write down the store or institution where the transaction occurred. Some people choose to write down specific categories for each transaction such as food, utilities, mortgage, eating out, etc. This also helps with budgeting.

4. Update your transactions daily if you share the account with someone else. If both you and your spouse share the account, make sure that all transactions are being recorded by checking the account daily. If you can, try to have your spouse save their receipts throughout the day, so you can record them in your checkbook. This worked out best for my family. My husband would save his receipts during the day and keep them on the dining room table for me to record each night.

5. Compare your checkbook to your account statements at least once a month. Take 10-15 minutes to compare your checkbook to your account statement once it becomes available. Also make sure that all checks that you have been written have cleared your account. Record any interest that the bank may have paid you, and subtract any fees.

6. Finish balancing the account. Once everything matches, and all checks and transactions have cleared the account, draw two lines under the “Balance” amount in your checkbook. This will allow you to determine the last known correct amount in your checkbook. This will also give you a starting point when looking for errors the next time you balance your checkbook.

Do you prefer pen and paper or an online tool to balance your checkbook? Let me know about it in the comments below.

Save

Save

Save

Save

Share55
Pin681
Share
Tweet
Email
736 Shares

Filed Under: Tagged With: BUDGET, BUDGET BASICS

Previous article:
« How to Stop Fighting with Your Spouse About Money
Next article:
Budgeting freaking sucks! Here’s how to love it. »

Comments

  1. Tracey says

    April 6, 2017 at 12:38 pm

    I prefer to do everything with a pen. Online stuff is pretty to look at but I much rather write and hold the papers/my notebook. I use a notebook for my monthly bills. I have a loose budget, that really serves as just a list of the bills I pay each month and the blaring fact that we are barely making it. Paycheck to paycheck isn’t even what we’re doing, I’m spilling into the next month, putting off what won’t cost me credit score points or late fees. Its frustrating. We’ve got debt to pay off, but since we relocated and I’m not working, we are sorely missing that extra couple grand I was bringing in per month. Any help you can give me is appreciated!!

  2. Amber says

    May 11, 2017 at 11:38 am

    I’ve been using the check book app on my phone. I try to enter the transaction right then. If not, I put the receipt in my pocket to enter later. I always declined receipts because I didn’t want the paper. Now I get irritated when I don’t get one. I try to check online daily to make sure I don’t miss anything and to mark transactions as cleared. I can’t afford the overdraft fees. And it’s embarrassing to be declined somewhere.

  3. Danielle says

    July 24, 2017 at 9:03 pm

    Do you offer a budget training online?

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

The Budget Mom

The Budget Mom
It’s time for another Real Life Budget. I asked my readers to submit their REAL information. Real spending, real debt, and real savings goals.

I am taking those real-life numbers and showing you how I would organize and budget that information using my Budget By Paycheck® Method.

If you would like to submit your budget information to possibly be picked for a Real Life Budget that we will show on YouTube, please reach out to budgets@thebudgetmom.com.

Diane is a single mom who is a Database Administrator for an IT Department at a local college. She lives in Queens, NY, and eventually wants to move to a lower-cost of living area in the future. 

Diane submitted her information because she is struggling to organize and tackle all of her larger short-term goals.

CHAPTERS:
00:00 Introduction
02:15 Why & Personal Story
04:20 Income 
04:37 Fixed Expenses
05:48 Variable Expenses
06:31 Debt
07:53 Savings Goals
10:18 Budget By Paycheck Method
14:51 My Recommendations

➡️ HOW I TRACK MY SPENDING: https://bit.ly/3aIe89I
➡️ HOW TO USE A BUDGET CALENDAR: https://bit.ly/2IzF2Vj
➡️ FINDING YOUR WHY: https://bit.ly/3aJUryj
➡️ THE BUDGET MOM'S FINANCIAL FREEDOM STEPS: https://bit.ly/3cfJXsp
➡️ HOW TO GET STARTED WITH THE CASH ENVELOPE METHOD: https://bit.ly/2vQJaO5
➡️ HOW TO CREATE A PLAN OF ATTACK TO PAY OFF DEBT: https://bit.ly/2wDETxF

ABOUT ME

Kumiko Love is a single mom who empowers women everywhere to regain control of their financial lives. An Accredited Financial Counselor with over nine years of experience in the finance industry, she founded The Budget Mom, a community of millions of women on a path to financial fulfillment.

She's also the creator of the wildly popular Live Rich Planner® and Budget by Paycheck® Workbook. Love has been featured on Good Morning America, the Today show, CNN, CBS, ABC and in USA Today, US News, World Report, Huffington Post, Money Magazine, Parents Magazine, the Washington Post, and Real Simple. She lives in Spokane Valley, Washington.

YOU CAN FIND ME AT:

📝 WEBSITE: https://www.thebudgetmom.com
📘 FACEBOOK: https://www.facebook.com/thebudgetmom/
📸 INSTAGRAM: https://www.instagram.com/thebudgetmom/
📌 PINTEREST: https://www.pinterest.com/thebudgetmom/

GET STARTED

➡️Start Here: https://www.thebudgetmom.com/start-here/
➡️Courses: https://courses.thebudgetmom.com/
➡️Free Resources: https://bit.ly/2PDmTHz
➡️GET 10% OFF my popular Budget-by-Paycheck Workbook - Coupon Code TBMYOUTUBE https://bit.ly/3FEdZFp

Soundstripe License Code: LBWMAQPEPWYVFKT3
Load More... Subscribe
Free Resource Library

Recent Posts

  • The Secret to Personal Finance I Never Learned About in Business School
  • Don’t Overpay for TV and Internet: How to Shop Around for the Best Deals
  • 4 Simple Tricks to Stick to Your Grocery Budget
  • Celebrate Without Breaking the Bank: How to Save for Special Events
  • 9 Things People in Their 50s Can Do to Prepare for Retirement

Blog Categories

Amazon Associates Disclosure

The Budget Mom, LLC is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

  • Cart
  • Shop Policies

Start With My Friday Newsletter

Every Friday I send you a short helpful email with my popular Friday freebie. Join my 500k+ subscribers!

About

  • Home
  • ABOUT TBM
  • Contact
  • Start Here

Important

  • DISCLAIMER
  • PRIVACY POLICY
  • Subscribe

Favorites

  • YouTube
  • Blog
  • Live Rich Planner
  • Budget by Paycheck

Start With My Friday Newsletter

Copyright ©2023, The Budget Mom®
This website contains affiliate links, which means that if you click on a product link, I may receive a commission. This website is a participant in the amazon services llc associates program, an affiliate advertising program where I earn advertising fees by linking to amazon.com.
  • How financially fulfilled are you? Take this 2 minute quiz to get your score!
    Click Here to Start