The Lost Art of Balancing A Checkbook

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“There’s a book that tells you where you should go on vacation.  It’s called your checkbook.”  Anonymous


10 second summary:  Take 10 minutes to balance your checkbook and compare it to your budget to see how your financial goals are going.  Haven’t balanced your checkbook in a while—or ever?  Today’s your lucky day!  No budget?  No worries, we’ll tackle that another day.  Balance your checkbook today.


The Lost Art of Balancing a Checkbook

Have you balanced your checkbook lately?  Have you balanced your checkbook ever?

As a former banker I know better than most that the average person no longer carries a checkbook register or balances their checkbook.  And while I’m perfectly OK with the whole technology-solutions-for-many-things thing, I confess I’m old fashioned in this category and still use a paper checkbook register.  (In case you don’t know, those come free of charge in boxes of checks you order—for those of you who still use checks—and can also be received free of charge at your friendly neighborhood bank or credit union.)

Still, it’s time for me to get with the times, check out some checkbook-like apps for my phone and choose the best one for me.

But first…YOU.  If you’re like most people you may be wondering why balancing your checking account, either electronically or via paper, is actually still important.  So here’s a speedy summary courtesy of Lisa White in her article, “7 Reasons to Balance Your Checkbook”:

Important note before I go through these…  Financial fraud is HUGE and growing daily.  If you don’t balance your checkbook you’re putting yourself, your finances, and in a monetary way your family at risk.  Don’t do it! 

Balance that thang! 

I promise, it’s super-easy and I’ll show you how.  I’m not a fan of freaking out or scare tactics, but because I care about you I gotta insist you take this seriously and do it.  Takes less than 10 minutes all-in once you get started.


Why Balancing Your Checkbook Matters

1.  Monitor your bank. Ensure your bank hasn’t made errors and your records match theirs.  (Trust me, I’ve worked there and we’re all human, it happens.)  If you report a bank error within 60 days they will likely correct it.  If you don’t technically YOU are then responsible ‘cause you didn’t—you guessed it—balance your checkbook to tell them there was a discrepancy.

2.  Overdraft fees add up quickly. Don’t pay a single penny in unnecessary bank fees, please!  A quick reconcile can and will save you those painful $38 fees or whatever your bank charges.  Wasted money is no bueno—balance up.

3.  Problem-solving is easier. If a problem does occur with your bank account, such as fraud or an error or both, it will be easy to spot and sort because you’ll know things were OK last time you balanced your checkbook and you’ll have a fixed window to scour your accounts for the fraud or other issues.  If you’ve never (or rarely) balanced your checkbook and suddenly you’re missing hundreds of dollars, guess what…it’ll be painfully tough to find.  And you may not get your money back.

4.  Merchants make mistakes too. So true!  Stores aren’t perfect—double charges, inaccurate billing, etc. is commonplace.  If you’re not balancing your checkbook you’ll never know if you’re missing money unnecessarily.  Balance, balance, balance ladies…

5.  The opportunity for fraud is multiplied. I already shared this one, but identity and data theft is large and growing ever larger.  Don’t be a victim, balance your checkbook and if you see unauthorized charges report them to your bank immediately.

6.  It can help with budgeting. Yes ma’am!  Hopefully you’ve got a plan and now’s your time to find out how you’re doing with it.  Think of it like losing weight.  Your spending is the food, and balancing your checkbook is the scale.  If you never (or rarely) “weigh in” you’ll never know how you’re doing.  The unknown, especially when it comes to money, creates stress and many a problem. And you don’t need that stress in your life.

7.  It can support your savings goals. We’ll be talking more about this later, but here are two rock-solid fundamental financial rules.  #1:  Put and pay God first (tithe).  #2:  Pay yourself second.  Everyone else comes next.  Start by putting away only $1 per paycheck, you gotta get that savings thing going and growing to get financial traction and create stability and a safety net.

OK, that’s my recap of Lisa’s awesome article, in my own words, so I can find 7 or more ways to say:  please balance your checkbook.


How to Balance a Checkbook

Here’s a great free checkbook balancing calculator online from CalculatorSoup.  You can plug in the numbers and it reminds you of the 4 simple steps:

1. Write down all transactions as you complete them, in your checkbook register.  Use a good ol’ paper register, or one of the freebie phone apps below.  If you’re rushed, keep the receipts in a pile in your purse or wallet next to your checkbook register then record them later.  My husband also leaves his receipts in a pile on a specific counter at our house for me to record later.  (If you forget or aren’t as lucky as I am in that area, just check your online banking transactions frequently.  Write down any you see that aren’t already in your checkbook, and make sure you or someone authorized in your household completed each one.)

If you aren’t currently keeping a checkbook register, this is your 10 minute homework for today.  Choose a paper register or a phone app and start keeping track.  If you have recent receipts record backwards for 1 week, or review the last 7 days worth of transactions for your online banking and write them down.  (Making sure they’re legit, of course.)  Take your bank available balance as-is as your starting balance for your checkbook (so the entry you see after recording everything), after accounting for any transactions you made that haven’t cleared yet.

2.  Compare your bank statement/online banking transaction info to your checkbook register and make sure all credits and debits match. Check them off one-by-one, starting from today and working backward to the last day you balanced your checkbook.  If you come across a transaction that’s not written down in error, record it in your checkbook and make sure you or someone authorized actually made it.  Note transactions you’ve made that haven’t yet cleared your account (outstanding checks you wrote, or certain stores and merchants that don’t immediately remove or place a hold on your money when you pay them).  Also note deposits you’ve made that haven’t posted yet (like when you deposit a check via phone and your bank places a hold on it for a few days).

3.  Make sure all transactions are subtracted from the account balance in the Balance column (or starting balance on the app).

4.  Check your balance.  And now for the magic. Grab your calculator and type in the Available Balance amount from your online banking.  Add any deposits you’ve made that aren’t yet showing posted.  Subtract any withdrawals that aren’t yet showing up (the ones you identified in step 2).  Hit the equal button and hold your breath…

Does the number on your calculator match the ending number on your checkbook?  If so, congrats and high five, you’re done!  Add a line below the most recent entry and write a “B” for balanced on the side of your paper check register to note when you last knew everything was perfect.  If you’re using an app, see if there’s a way to notate that you’ve reconciled everything.  If not you can always mark the date on your phone’s calendar or whatever’s easy to remember.


Out of Balance?

Life’s not perfect so what if it doesn’t balance?  My personal tips…

If it’s below $10 (heck, maybe even $20), don’t sweat it at all.  It’s not worth your time to find the error.  For real.  Don’t go crazy perfectionist on me (and I can say that as a recovering perfectionist) you don’t really need to know if you made a typo on your calculator, swapped a number, or, like me, couldn’t read your own writing.  If it’s a duplicate entry or even an error it’s still not really worth your time to find (unless you are truly flat broke or have gobs of time on your hands—and if either of those were true you probably wouldn’t be reading this).  If it makes you feel better, most banks write off errors below $10 and just keep going.  Do the same.  Trust your bank balance, make a note that says something like “balance adjustment” and move on with your life.

If it’s above $10 or so, start searching.  First step is to subtract the balance you have from the bank balance and get the exact difference.  Why?  ‘Cause that number might jump out at you as something you forgot to record or accidentally recorded twice.  It might be something that was accidentally withdrawn from your checking account twice by the company you paid.  Beyond that, look for errors in math when subtracting purchases from the balance column, mismatched, etc.  Repeat step 2 and double-triple check that everything balances.  Somewhere in there something doesn’t add up so dig it out and fix it up.

Found something that’s not yours?  Call your bank IMMEDIATELY to make sure you have a chance to get your money back—remember the time limits, don’t miss out.  The faster you report, the more likely the authorities have a chance to actually catch the criminals in some cases, too.

There, doesn’t that feel great?!?  It’s like spring cleaning, but less scary (after you’ve gotten started anyway).  The more often you do it the easier and quicker it gets.  Whatever it takes, please get this done regularly—your financial health will thank you.


Checkbook Apps Review

Ok, final quick tips then this is a wrap…  Here is the fastest review you’ve ever seen of 3 top phone apps to balance your checkbook, as reviewed by AppCrawler and yours truly:

Checkbook – Spending, Income, Cashflow and Account Tracker

This one wins my vote of approval and I’ll be using it!  It gets an 8.9 out of 10 in reviews from over 6,000 users, which is pretty slick.  Love the simple images, thorough tracking, and intuitive stuff (fewer clicks, don’t have to use the decimal key, etc.)  Looks like it can also assist with category spending assessments if you choose to use those features.  And if you’d rather keep things super simple it’s great for that too.

Balance My Checkbook

752 users give this app a rating of 9.2 outta 10 and I think it’s pretty swell too.  Not as good as the one above in my opinion, but I’d use it in a pinch.  It requires a few more clicks to add decimals to each dollar amount and record items but it has a cool sync-with-others feature you can activate (for a few dollars of course) which would be amazing if you and everyone attached to your checking account will actually use it.  That’s for you to decide.  Because I’d already seen apps with category labels (food, gas, medicine, etc) I missed those on this app, but if you’re going for sleek and uber simple this one definitely gets it done.

Checkbook HD Free

This one gets a very respectable 9.4 out of 10 review from over 10,000 users, but it was my least favorite of these 3.  I just didn’t like the look and flow as well as the others and it had by far too many clicks.  Also I believe it said something silly like it could only record 15 transactions then you have to upgrade to the paid version, and who would only use 15 entries?  Not ideal.

OK ladies, what’s it gonna be?  Chose your app or paper and get to balancing.  Remember balancing your checkbook is like checking your physical weight—assess the reality of what is and either celebrate or work to improve.

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