How to Balance a Checking Account

It is important to balance your checkbook as soon as your bank statement is available, either online or via mail. This is the best way to double-check that you didn't forget an entry on your check register and that all your math is correct. Not doing this could result in an inaccurate account balance and lead you to think you have more money in your account than you actually do. With the wrong information, you could bounce a check and incur overdraft fees. It only takes a few minutes at the end of each month to reconcile your checkbook and ensure the balance is correct.

How to Balance a Checking Account
Image Credit: JDiamante/iStock/GettyImages

Log All Transactions Right Away

The key to having a balanced checkbook is taking the time to log each transaction in your check register as you make it. If you stop at an ATM and withdraw $20, don't leave the bank's parking lot without subtracting $20 on your check register. If you treat a friend to lunch at the local diner and pay with your debit card, don't leave the restaurant without adding this information to your check register. Each recorded transaction should include the date, check number if applicable, explanation, amount and new total balance.

Examine the Bank Statement

As soon as you get the bank statement, you'll want to compare the transactions with the entries you made in the check register. Go through the statement one line at a time and either highlight the matching entry in your register or place a check mark next to it. When you're done, you'll be able to see if there are any entries in your checkbook that don't appear on your statement.

Add Missing Information

At the same time, you'll want to make a check mark next to each entry on your statement as you find it in the check register. Every unchecked item means that's something you forgot to enter in your register. In addition to logging the missing transactions in your register, you'll need to take a look at the bank statement to see if you were charged any fees or if you earned any interest. It is now time to list these in your check register.

Use the Form

Almost every bank provides a balance form on the back of the monthly checking account statement. If you don't receive a paper statement, your bank's website probably has the form you use to balance your checkbook. Start the process with the ending balance on your bank statement. Add any deposits you made since the statement was issued to the ending balance. Afterward, subtract any withdrawals that have not cleared or that you made since the statement was issued. This total should match the total in your check register.

Locate Any Errors

If your totals do not match, you'll need to carefully review each transaction since your last statement to find the error. For example, you may have written $53.06 in your register when you should have written $35.06. It is best to use a calculator at this stage in case you made a mental error when adding or subtracting from previous totals. You might find it helpful to draw a line under the last entry once you've balanced your checkbook. When you get next month's statement, you'll be able to quickly look back and see where to start.

Utilize Online and Mobile Banking

You don't need to wait for your next statement to arrive to keep your checkbook balanced. Log in to your bank's online system, or open up the bank's mobile app to view your recent transactions. Compare them with your check register. If you do this once each week, you'll be able to spot and correct any problems much sooner.