One
of the most basic steps to good money management is balancing
your checkbook each and every month. Balancing
your checkbook is a two step process 1) "balancing"
which involves checking the addition and subtraction in your checkbook,
and 2) "reconciling"
which means getting your figures and the bank's figures to match.
This is an important tool to help you monitor your spending, but
also to alert you to any fees that the bank may have charged that
you weren't expecting or to any errors that either you or the
bank may have made. If the bank has made an error, typically you
have 60 days to report the problem. You will definitely want to
be aware of any errors that you have made such as a mistake in
your addition or subtraction, or forgetting to enter a purchase
or a withdrawal which can cause you to incur fees if your account
becomes overdrawn. If you use your ATM card frequently, the possibility
of these kinds of errors increases dramatically.
Now
that the importance of balancing your checkbook has been explained,
let's discuss the basics of balancing your checkbook.
1. Step One: Gather Together Your Bank Statement, Receipts,
and Checkbook Register
You will first want to examine your bank statement for accuracy.
2.
Step Two: Reconcile Your Checks, Withdrawals, and Any ATM Transactions
Next
you will want to make sure that all of your transactions have been
properly recorded
in your checkbook register and that all of the arithmetic is
correct. 3.
Step Three: Record Any Interest Earned or Bank Fees That Have
Been Recorded 4.
Step
Four: Complete a Checkbook
Balancing Form
Note:
Your calculations and the bank's calculations must match! If
your calculations and the bank's don't match, double check your
work for any errors or omissions. If they still don't match, you
may want to contact the bank. This is important because failure
to balance your checkbook can result in returned checks and Non-Sufficient
Fund fees charged by both the bank and the business to whom the
check was presented.
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