How much time you spend planning your financial future determines how financially fit you’ll be in the future. Learning how to do things like balancing a checkbook are the basics every adult should be learning on their financial journey. According to a study done by Statistics Brain, 69% of people have never balanced their checkbook and 21% of people do it religiously.
The purpose of even balancing your checkbook in the first place is to know how much money you have in your accounts at all times. This is a great way to hold yourself accountable for the money you spend daily.
If you've been struggling with this part of your finances, here’s what you need to know about balancing your checkbook:
Balancing the checkbook - Balancing your checkbook requires the recording of all transactions you make involving money. It doesn't matter if you wrote out a check or not, but you are keeping a record of the deposits and withdrawals made from your account. An easy way to keep track if you have a bad memory, is to also keep a record of purchase. Holding on to your receipts, regardless of how small the buy was, is going to help you tremendously when it comes to keeping accurate financial records.
Most checkbooks come with a register, another booklet in which you can record all of your transactions. Some registers come with a calculator and some do the calculations for you, but they all have a place for you to record your remaining balance.
Reconcile - Recording each transaction is only part of this process. You also have to be sure to cross reference your records with your bank statements to make sure you didn't miss anything. We're human and we make mistakes, so double-checking to make sure all of your money is accounted for is key to accuracy. It's also good to keep in mind that the smaller your balance is, the more precise your records need to be as well.
Check for fraud - One major you'll have as someone who regularly checks their bank statements and tracks where their money is going, is that you'll be able to spot fraudulent activity pretty fast and easily. Don't think that you should go looking for large amounts of money missing either. In reality, if your credit or debit card is ever compromised, there will most likely be a charge of only $1, since the thief is checking to see if it will work or not.
How often do you balance your checkbook?