How to balance your check book .. checkbook balancing

Balancing your checkbook is the only way to know whether you and your bank agree about the amount in your checking account. The monthly bank statement lists all transactions: deposits, withdrawals, service charges, such as stop-payment orders, and interest (if your account bears interest). The sooner you reconcile the statement with your checkbook, the easier it will be to find and correct an error.

With your statement you probably receive cancelled checks for the period covered (some banks are phasing out this service). If checks are included, first compare each one with the figure listed on the statement, then put the checks in numerical order and compare them with your check stubs or register. If your bank doesn’t return checks, simply compare each item on the statement with stubs or register. (Keeping careful records, always important, becomes even more so as banks eliminate returning cancelled checks.) Next, compare your deposit receipts or records with deposits listed on the statement.

If you find no errors in making any of these comparisons, you’re ready to take the next steps: 1. Add up all outstanding checks (those not returned or listed and those written after the statement was issued), including unlisted withdrawals made with bank cards from money machines. Subtract the total from the final balance on your statement. 2. Add all subsequent, unlisted deposits to the statement balance. 3. Subtract from this total any service charges. If the account is interest bearing, add the listed interest.

At this point, you and your bank should agree. If you don’t, recheck your figures. Look closely at your handwriting; a confusing or illegible figure may have caused an error. Make sure you haven’t overlooked an outstanding check or machine withdrawal. If you find no explanation for the discrepancy, take your records to the bank as soon as possible.