Simple Money Management: Balancing Your Checkbook
Balancing your checkbook may seem old-fashioned, but reconciling your finances each month is one of the most basic habits of good money management. If you don’t already record your purchases, withdrawals and deposits, you’ll find an organized checkbook is a great first step toward smart financial planning.
A reconciled checkbook:
- Reduces the risk of bouncing checks or overdrawing an account. This is not only embarrassing, but costly, as overdraft fees really add up.
- Diminishes the possibility of mistakes. Although the bank rarely makes errors, slip-ups do occur. Customers typically have only 60 days to report a mistake in their statement. If you are not balancing your checkbook, you may never realize the bank owes you money!
- Promotes other positive financial habits. An organized checkbook is a great way of tracking your spending habits. By reviewing your cash flow on a monthly basis, you’ll be more aware of how you spend your money. An organized checkbook can help you budget, spend and save more wisely.
How to balance your checkbook:
- Determine the exact amount of money you have in your checking account. Record this amount in your checking account ledger.
- Every time you make a purchase with your debit or check card, deposit money, pay a bill or make an ATM withdrawal, record the amount in your ledger.
- Recalculate the balance in your account after every transaction, at the end of the day or a few times a week.
- At the end of the month, reconcile your ledger with your monthly statement. Look for errors, un-cashed checks and any purchases, withdrawals, etc that you forgot to record.
- Correct any mistakes by contacting National Iron Bank as soon as possible.