How To Balance A Checkbook

A balanced checkbook confirms the balance in your check register is equal to the balance shown by your financial institution. Balancing a checkbook is simple if you follow just a few easy steps. All you need is your check register, most current bank statement, pen or pencil, and a calculator.

Step 1) Reconcile your checks.

Your bank statement will list each check that has been presented. Look at each check number and verify that the amount recorded in your checkbook register is the same as the amount on the bank statement. Put a check mark beside each check in your register that appears on the bank statement. You may have some checks in your register that do not appear on your statement. That only means that check has not been presented to your bank yet and will be covered in another step. Only put a check mark next to checks that appear on the statement.

Step 2) Reconcile your deposits.

Similar to the above step, verify that the deposit amounts showing in your register are the same as the deposits listed on the bank statement. Put a check mark beside each deposit in your checkbook register that appears on the bank statement. Again, there may be some deposits that don't appear on the statement. That only means that the deposit has not been posted yet. That will be covered later. Only put a check mark next to deposits that appear on the statement.

Step 3) Reconcile ATM withdrawals and debit card transactions.

Next, put a check mark beside each ATM withdrawal or debit card transaction. You may find that you forgot to record one of these transactions. Just add it to your check register with the correct amount. Don't forget to put a check mark beside that transaction since it does appear on the bank statement.

Step 4) Add interest earned or subtract any bank fees.

You may have interest earned or bank fees listed on your bank statement. They must be posted on your check register to insure balance. Post interest earned as a deposit and any bank fees as a withdrawal in your register, putting a check mark beside each one since they appear on the bank statement. This is a step that some people forget but it will affect your balance.

Step 5) List outstanding checks, ATM withdrawals, or debit card transactions.

These are checks or any transactions that do not appear on your bank statement but are recorded in your checkbook register. Make a separate list of all these transactions and total them.

Step 6) List outstanding deposits.

Just like above, make a list of the deposits that do not appear on your bank statement but are recorded in your checkbook register. Total this list of deposits.

Step 7) Calculate your balance.

This is where you will make sure the balance in your register equals the balance of your bank. Locate on your bank statement the closing or ending balance. Write down that amount on a new list. Add to this the amount of outstanding deposits from Step 2. From that total, subtract the amount of outstanding checks from Step 5. This total should match the total in your checkbook register. If the totals do not match, it's probably a simple error in addition or subtraction in your check register or an error in recording the amount of a transaction. Go through your register and recalculate, making any necessary corrections. Then try calculating your balance again. When this balance is equal to the amount in your check register, then you have balanced your checkbook. Well done!