Balancing your checkbook

Published 9:54 pm Thursday, October 4, 2018

By Mark McGahee

Do you know how much money you have in your checking account? If you keep your checkbook balanced, answering that question becomes easier.

Balancing, reconciling, whatever you want to call it — this is a core financial skill, even if you happen to do all your banking online. If you bounce a check, overdraft fees can be high. And it’s a useful skill, even in our digital age.

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While apps like Mint and Prism give you a real-time look at account balances, transactions and monthly debts to pay, their alerts and notifications do not necessarily instill good money habits. Balancing a checkbook takes just a few minutes a month and having a hard-copy portrait of your checking account is a plus. Noting your transactions (and fees) helps you keep on top of your personal finances. It may even help you spot a mistake.

First step: consistently record what happens with your checking account. Consistency is everything. Record debit card withdrawals, ATM deposits and withdrawals, even fees. If jotting all this down in that bland-looking check register gives you the blues, consider using a check register app on your phone or tablet as an alternative.

Second step: reconcile. Reconciling occurs when you compare your monthly checking account statement with your personal record of checking account activity. Ideally, you look at them and find no difference. If something seems amiss, you can quickly determine whether it is a case of bank error or human error. Some personal financial apps have a reconciling function that makes this whole process more or less instant.

Balancing your checkbook is easier than ever. You could elect to be nonchalant about it, especially if you happen to have a huge balance in a personal (or business) checking account — but a carefree attitude might leave you poorer and more pinched financially than you want to be. It is best to be thrifty and keep track of your deposits and withdrawals.

Mark McGahee can be reached at 539-9465 or