Do you know how to balance a checkbook? Many people today never took an accounting class or were taught by their parents how to balance a checkbook. With the modern world, we live in today, people feel like it’s a waste of time. Even with all the cool luxuries of online banking, it’s not a bad idea to still have a checkbook on the side.
How to Balance a Checkbook
This way you can track for any errors quicker than simply glancing down at a bank statement. Knowing how to balance a checkbook can also help you avoid withdrawal fees and help you determine if there’s fraudulent activity going on in your bank account. Here are a few tips on balancing your checkbook like a pro.
Know your Balance
Knowing how much you have in your bank account is the first place to start. Now you can pull out your checkbook and write your balance, so you can get rolling in the right direction.
Record Your Transactions
When you’re recording your transactions, you’ll need to include the date, a brief description, and the amount that you purchased.
Be sure to include the check numbers if you’re writing a check. Starting with your balance, subtract your first transaction from that balance and write the new balance on the next line.
If you make a deposit, add that amount to your balance and write your new balance on the line after that. Continue this process until you have all your transactions listed on the ledger.
Go Over Your Monthly Bank Statement
It’s important to go over your monthly bank statement by comparing it next to your checkbook, to verify that there are no differences.
You might have made a withdrawal from your bank, with the intention to write it down in your checkbook but forgot. Go back to your checkbook and subtract that withdraw the amount from your balance.
Pay Close Attention for Errors
At the end of the day, both your statement and checkbook should align, unless you’ve made other transactions after the statement was printed. If you’ve compared your statement to your register, after going back over the arithmetic and there are still discrepancies, contact your financial institution immediately. The longer you wait, the more liable you are to any fraudulent activity that may have happened to your account.
Modern Banking Tips Everyone Should Know
Get Online Banking
Technology has come a long way with how banks can deal with your money. Consider getting an online bank account set up and track your finances that way. You can see every transaction almost immediately after it has happened. Just like a checkbook.
There are also smartphone apps out there that you can get to help keep track of your bank account. Even if you aren’t at home or near a computer, a banking app can tell you everything about your money.
Get Text Alerts
Getting text alerts is also an option with smartphone apps. This way, as soon as the bank notices a withdrawal or deposit, you will immediately receive an alert on your phone. You’ll know right away when a bill and also helps you from running into undesirable withdrawal fees.
Automate Most of Your Bills
Automating your bills can also help save you time and energy. Not only can you have your paycheck automatically put into your bank account, if you wish, but you can also have your bills paid automatically, right out of your account.
Whether you choose to use online banking or stick with the old-fashioned checkbook, one way or another, stay on top of every transaction that is taking place in your bank account. Do you prefer the hands-on method of using a checkbook, or do you use online banking as a way of tracking your expenses?
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