Apr 2010
23
Keep Track of Your Transactions
Balancing your checking account is basically agreeing with the bank on how much money you have in your account and the only way to do that is to track your spending. There are two ways to keep track of your spending. The most common way (which is probably the safest way, too) is to carry you checking account register with you at all times. These registers typically come with your new checks and they fit nicely in your back pocket or in your checkbook cover. Every time there is a transaction, such as a purchase or a deposit, write it in your register. Then, when you get home, balance the register by adding and subtracting the appropriate items to arrive at the figure that should be sitting in your account.
Another common way to keep track of your spending is to save your receipts throughout the day. When you come home at the end of the day, enter those transactions either into your checkbook register or a spreadsheet. With a spreadsheet, you can program it to do all of the calculations for you. The only thing to consider when tracking your spending through receipts is to know how much is in your account and how much you are spending throughout the day so you do not end up with a negative balance by the end of the day.
Check Your Account Statements
With online banking, there is no excuse for not being able to reconcile your checking account with the actual bank statements every few days. Ignoring your bank statements – both online and the ones that come in the mail – can only lead to financial disaster.
While looking at the statements from your bank, compare the transactions on that list to the list of transactions you keep for yourself. Make sure you have all the transactions that the statement lists also listed on your spending record. This includes any bank fees, service charges or any other transaction that affects your bottom line. You should notice that both lists are the same and the ending balances are the same. If not, go back through both lists until you find where a mistake was made. Banks do make mistakes, but with computers tracking your account, it is more likely that you made a mistake in your calculations or you may have forgotten a transaction or two.
If you check your bank statements every few days, balancing and reconciling your checking account will not be such a daunting task. It is only when you let it slip for a couple weeks or more that you forget transactions and make other mistakes.
Do Not Rely on ATMs
Many people think they can just check their balances at the ATM before withdrawing money. The problem is that the ATM does not always have the most accurate and up-to-date information. You may have some checks or other debits that have not cleared when you are at the ATM so if the balance receipt says you have $200 and you take out $180 without remembering that $100 check that has not cleared yet, you are going to be responsible for some overdraft charges.
Buy a Budgeting Program
There are several quality budgeting programs on the market today that are designed to help you keep track of your spending. Some of the more popular budgeting programs will even categorize your spending so you can see where your money is going at the end of a particular month or a certain period. That way, you can make adjustments in your budget or lifestyle.
Balancing your checking account is such a simple task, but it is something that needs disciple. It can be time-consuming, but it can also be very costly if you ignore. Don't let your account to get “into the red.” The best thing to do is to take a few minutes every few days and go over your account to ensure everything matches up. A few minutes a week will save you hours of frustration and possibly hundreds of dollars in the long run.
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